Therapeutic proteins have become a cornerstone of modern medicine since the FDA approval of recombinant human insulin in 1982. Likewise, biosensors transform chemical detection and disease diagnostics by identifying biomarkers, chemical contaminants, and infective agents. Long-standing methods for creating therapeutics and biosensors employ whole cells such as Escherichia coli (E. coli). Alternatively, cell-free protein synthesis (CFPS) employs the enzymatic reactions necessary for protein production and biosensing within a cell, but in an engineered reactor environment facilitating unprecedented access to and control over biochemical machinery, preservation by cryodesiccation for portable deployment, and functionality in cytotoxic applications. This dissertation reports advances in an E. coli CFPS production platform toward creating therapeutic proteins by this means. First, an endotoxin-free CFPS platform is created by optimizing fermentation and cell-extract harvest of an endotoxin-free E. coli strain. Next, liquid cell growth culture media is specially formulated to change chemical composition during cell culture and provide a streamlined method for producing high-yielding, endotoxin-free E. coli CFPS. Then, novel CFPS bioreactor formats are mathematically validated and developed which employ "hydrofoam" and oxygen to increase therapeutic protein production yield. Additionally, advances are reported in CFPS biosensing technology. First, a chimeric fusion protein incorporating the ligand binding domain of the human estrogen receptor is expressed in CFPS to detect estrogenic chemicals in the presence of human blood and urine. Next, the molecular mechanism of this protein construct is elucidated and the assay readout is optimized with mathematical simulations and CFPS. Then, CFPS is metabolically engineered to create a biosensor of L-glutamine, the most abundant amino acid in the body. Finally, this dissertation reports the development of a synergistic platform for potentially treating Acute Lymphoblastic Leukemia wherein CFPS is engineered to both produce the therapeutic protein crisantaspase and assess its activity in the presence of human serum for improved, potentially even personalized treatment of the disease. It is anticipated that the advances reported herein will contribute to the utility of in vitro or cell-free protein synthesis for therapeutic and diagnostic applications.