Microphysiological systems (MPS) are advanced in vitro platforms engineered to replicate in vivo conditions for studying human biology, disease mechanisms, and drug responses with greater physiological relevance. Fluorescence sensing is widely used as a functional readout in MPS due to its high sensitivity, selectivity, and stability. However, conventional fluorescence sensing systems often rely on bulky instrumentation with limited integration, which restricts continuous in situ monitoring, scalable high-throughput analysis, and spatially resolved investigation in multi-organ-on-a-chip models. To address these limitations, we present a highly miniaturized, fully integrated optical system with a 1 mm² footprint, enabling continuous in situ fluorescence monitoring of three-dimensional microtissues in close proximity. The system integrates microscale illumination and sensing units for fluorescence excitation and selective detection, an optical element for guided light propagation, and a microcage for mechanical confinement of microtissues. To demonstrate its capabilities, we integrated the miniaturized optical system with an MPS-relevant platform to monitor fluorescence signals in transgenic mouse pancreatic islets expressing genetically encoded calcium indicators. The integrated platform enables real-time, continuous monitoring of islet responses to potassium chloride stimulation and tracking of calcium oscillations for over two hours, providing valuable information about the functional status of the pancreatic islets. Our work enhances the analytical capabilities of MPS through the integration of miniaturized on-chip quantitative assessment tools, enabling precise, in situ, and continuous monitoring of biological activities in close proximity.