The demand for high efficiency and reliability from miniaturized sensor systems is directing research and development towards integrated sensors with as much electronic signal conditioning on the sensor chip as possible. However, the technological constraints do not always allow reliable and cost-effective integrated signal-conditioned sensors to be fabricated. Another stumbling block in the advance and development of integrated signal-conditioned sensors is the lack of a simple and effective encapsulation, packaging and interconnection technology. This situation is worse for chemical, biological and biomedical sensors, since the very nature of these sensors requires that their sensing elements should be in direct contact with the chemical or biological analyte, which from an electronic point of view constitutes a hostile environment. This paper looks into the possibility of a combined solution to these problems using a system-level approach integrated on a multichip module. Also, it presents a novel epoxy multichip module fabrication technology for the integration of sensors and signal-processing chips.