Protection and aesthetics are the two common dimensions or attributes typically associated with textiles as clothing. However, with the rapidly changing needs of today's consumers, a third dimension is emerging—that of “intelligence”—that is being integrated into fabrics to produce interactive textiles, or i-textiles. This new class of wearable electronic systems is being designed to meet new and innovative applications in the military, public safety, healthcare, space exploration, sports, and consumer fitness fields. In this article, the concept of i-textiles is presented, along with the building blocks for its realization. This is followed by an overview of the design and development of the Smart Shirt, an “intelligent” garment that provides an extremely versatile framework for the incorporation of sensing, monitoring, and information-processing devices. The key applications of the Smart Shirt technology and their impact in transforming healthcare are discussed. Finally, the need to advance this paradigm and identify opportunities to transform passive textiles into the new generation of interactive, or “smart,” textiles is discussed.