Molecular beacons have the potential to become a powerful tool in gene detection and quantification in living cells. Here we report a novel dual molecular beacons approach to reduce false-positive signals in detecting target nucleic acids in homogeneous assays. A pair of molecular beacons, each containing a fluorescence quencher and a reporter fluorophore, one with a donor and a second with an acceptor fluorophore, hybridize to adjacent regions on the same target resulting in fluorescence resonance energy transfer (FRET). The detection of a FRET signal leads to a substantially increased signal-to-background ratio compared with that seen in single molecular beacon assays and enables discrimination between fluorescence due to specific probe/target hybridization and a variety of possible false-positive events. Further, when a lanthanide chelate is used as a donor in a dual-probe assay, extremely high signal-to-background ratios can be achieved owing to the long lifetime and sharp emission peaks of the donor and the time-gated detection of acceptor fluorescence emission. These new approaches allow for the ultrasensitive detection of target molecules in a way that could be readily applied to real-time imaging of gene expression in living cells.