This review summarizes the current state of research on sensor-integrating machine elements (SiMEs) as enablers of digitalization in mechanical engineering and their application in industry. The focus is on the methodological aspects of developing SiMEs, including their robust design, modularization, and integration of smart materials and sensory functions. The authors, part of a DFG-funded research program, aim to facilitate interdisciplinary exchange and address open challenges such as energy supply, data transfer, and data security in rotating systems. SiMEs are machine elements that integrate sensors directly into their structure, enabling real-time monitoring of mechanical processes. They differ from purpose-built design elements in their standardized interfaces and production tools. The classification of SiMEs is based on sensor output or functional structure, with the latter involving channeling, transforming, connecting, and changing mechanical energy to sensor signals. Sensor-integrating machine elements are characterized by a direct relationship between the machine element's function and the measured variable, such as force or temperature. The development of SiMEs involves overcoming challenges like stress concentrations due to sensor integration, which can reduce load-carrying capacity and stiffness. The authors emphasize the need for dimensioning rules to account for these effects. Additionally, the integration of smart materials, such as electroactive polymers, offers potential for fully integrated, autonomous sensor-actuator systems. The paper discusses sensor materials and principles, including thermostrictive, electrostrictive, magnetostrictive, piezoelectric, and electrochromic materials. These materials enable sensory effects in machine elements through electrical resistance, capacitance, or inductance, which can be used for strain gauges, lubrication film thickness measurement, and coil springs. Add-on sensors, such as the VarioSense concept, require additional space and can impact system performance. However, standardized solutions like load cells and torque measuring flanges are widely used. The paper also addresses the engineering of SiMEs, emphasizing the need for methodical approaches to balance mechanical and sensing functions, ensuring robustness in measurement procedures, and modularization of sensor systems. Modularization is crucial for efficient development and reusability of SiMEs. The paper discusses various modularization methods, including design structure matrices (DSMs) and product-strategic approaches, which help in managing component variations and ensuring compatibility across disciplines. The integration of systems engineering and model-based approaches is highlighted as essential for the development of complex mechatronic systems. The review concludes that the development of SiMEs requires a multidisciplinary approach, with a focus on modularization, robust design, and the integration of smart materials. The authors emphasize the need for further research to address open challenges and to provide standardized solutions for the wide range of applications in mechanical engineering.This review summarizes the current state of research on sensor-integrating machine elements (SiMEs) as enablers of digitalization in mechanical engineering and their application in industry. The focus is on the methodological aspects of developing SiMEs, including their robust design, modularization, and integration of smart materials and sensory functions. The authors, part of a DFG-funded research program, aim to facilitate interdisciplinary exchange and address open challenges such as energy supply, data transfer, and data security in rotating systems. SiMEs are machine elements that integrate sensors directly into their structure, enabling real-time monitoring of mechanical processes. They differ from purpose-built design elements in their standardized interfaces and production tools. The classification of SiMEs is based on sensor output or functional structure, with the latter involving channeling, transforming, connecting, and changing mechanical energy to sensor signals. Sensor-integrating machine elements are characterized by a direct relationship between the machine element's function and the measured variable, such as force or temperature. The development of SiMEs involves overcoming challenges like stress concentrations due to sensor integration, which can reduce load-carrying capacity and stiffness. The authors emphasize the need for dimensioning rules to account for these effects. Additionally, the integration of smart materials, such as electroactive polymers, offers potential for fully integrated, autonomous sensor-actuator systems. The paper discusses sensor materials and principles, including thermostrictive, electrostrictive, magnetostrictive, piezoelectric, and electrochromic materials. These materials enable sensory effects in machine elements through electrical resistance, capacitance, or inductance, which can be used for strain gauges, lubrication film thickness measurement, and coil springs. Add-on sensors, such as the VarioSense concept, require additional space and can impact system performance. However, standardized solutions like load cells and torque measuring flanges are widely used. The paper also addresses the engineering of SiMEs, emphasizing the need for methodical approaches to balance mechanical and sensing functions, ensuring robustness in measurement procedures, and modularization of sensor systems. Modularization is crucial for efficient development and reusability of SiMEs. The paper discusses various modularization methods, including design structure matrices (DSMs) and product-strategic approaches, which help in managing component variations and ensuring compatibility across disciplines. The integration of systems engineering and model-based approaches is highlighted as essential for the development of complex mechatronic systems. The review concludes that the development of SiMEs requires a multidisciplinary approach, with a focus on modularization, robust design, and the integration of smart materials. The authors emphasize the need for further research to address open challenges and to provide standardized solutions for the wide range of applications in mechanical engineering.