This expository paper introduces the concept of on‐line sensor methodologies for monitoring the integrity of components in next generation power systems, and explains general benefits of the approach, while describing early conceptual developments of suitable NDE methodologies. The paper first explains the philosophy behind this approach (i.e. the design‐for‐inspectability concept). Specifically, we describe where and how decades of accumulated knowledge and experience in nuclear power system maintenance are utilized in Generation IV power system designs, as the designs are being actively developed, in order to advance their safety and economy. Second, we explain that Generation IV reactor design features call for the replacement of the current outage‐based maintenance by on‐line inspection and monitoring. Third, the model‐based approach toward design and performance optimization of on‐line sensor systems, using electromagnetic, ultrasonic, and radiation detectors, will be explained. Fourth, general types of NDE inspections that are considered amenable to on‐line health monitoring will be listed. Fifth, we will describe specific modeling developments to be used for radiography, EMAT UT, and EC detector design studies. © 2003 American Institute of Physics