The mammalian gut and its microbiome form a temporally dynamic and spatially heterogeneous environment. The inaccessibility of the gut and the spatially restricted nature of many gut diseases translate into difficulties in diagnosis and therapy for which novel tools are needed. Engineered bacterial whole-cell biosensors and therapeutics have shown early promise at addressing these challenges. Natural and engineered sensing systems can be repurposed in synthetic genetic circuits to detect spatially specific biomarkers during health and disease. Heat, light, and magnetic signals can also activate gene circuit function with externally directed spatial precision. The resulting engineered bacteria can report on conditions in situ within the complex gut environment or produce biotherapeutics that specifically target host or microbiome activity. Here, we review the current approaches to engineering spatial precision for in vivo bacterial diagnostics and therapeutics using synthetic circuits, and the challenges and opportunities this technology presents.