Living organisms are made of cells that are capable of responding to external signals by modifying their internal state and subsequently their external environment. Revealing and understanding the spatio-temporal dynamics of these complex interaction networks is the subject of a field known as systems biology. To investigate these interactions (a necessary step before understanding or modelling them) one needs to develop means to control or interfere spatially and temporally with these processes and to monitor their response on a fast timescale (< minute) and with single-cell resolution. In 2012, an EMBO workshop on 'single-cell physiology' (organized by some of us) was held in Paris to discuss those issues in the light of recent developments that allow for precise spatio-temporal perturbations and observations. This review will be largely based on the investigations reported there. We will first present a non-exhaustive list of examples of cellular interactions and developmental pathways that could benefit from these new approaches. We will review some of the novel tools that have been developed for the observation of cellular activity and then discuss the recent breakthroughs in optical super-resolution microscopy that allow for optical observations beyond the diffraction limit. We will review the various means to photo-control the activity of biomolecules, which allow for local perturbations of physiological processes. We will end up this review with a report on the current status of optogenetics: the use of photo-sensitive DNA-encoded proteins as sensitive reporters and efficient actuators to perturb and monitor physiological processes.