Specific aims of this study are to investigate the mechanism governing surface stress generation associated with chemical or molecular binding on functionalized microcantilevers. Formation of affinity complexes on cantilever surfaces leads to charge redistribution, configurational change and steric hindrance between neighboring molecules resulting in surface stress change and measureable cantilever deformation. A novel interferometry technique employing two adjacent micromachined cantilevers (a sensing/reference pair) was utilized to measure the cantilever deformation. The sensing principle is that binding/reaction of specific chemical or biological species on the sensing cantilever transduces to mechanical deformation. The differential bending of the sensing cantilever respect to the reference cantilever ensures that measured response is insensitive to environmental disturbances. As a proof of principle for the measurement technique, surface stress changes associated with: self-assembly of alkanethiol, hybridization of ssDNA, and the formation of cocaine-aptamer complexes were measured. Dissociation constant (Kd) for each molecular reaction was utilized to estimate the surface coverage of affinity complexes. In the cases of DNA hybridization and cocaine-aptamer binding, measured surface stress was found to be dependent on the surface coverage of the affinity complexes. In order to achieve a better sensitivity for DNA hybridization, immobilization of receptor molecules was modified to enhance the deformation of underlying surface. Single-stranded DNA (ssDNA) strands with thiol-modification on both 3' and 5' ends were immobilized on the gold surface such that both ends are attached to the gold surface. Immobilization condition was controlled to obtain similar receptor density as single-thiolated DNA strands. Hybridization of double-thiolated DNA strands leads to an almost two orders of magnitude increase in cantilever deformation. In both DNA hybridization and the conventional mode for cocaine detection, the lowest detectable concentration was determined by binding activity between the ligand and receptor molecules. In order to overcome this limitation for cocaine detection, a novel competition sensing mode that relies on rate of aptamers unbinding from the cantilever due to either diffusion or reaction with cocaine as target ligands in solution was investigated. The rate of unbinding is found to be dependent on the concentration of cocaine molecules. A model based on diffusion-reaction equation was developed to explain the experimental observation. Experimental results indicate that the competition mode reduces the lowest detectable threshold to 200 nM which is comparable to that achieved analytical techniques such as mass spectrometry.