Abstract: To create applications for smart environments we can select from a huge variety of sensors that measure environmental parameters or detect activities of different actors within the premises. Capacitive proximity sensors use weak electric fields to recognize conductive objects, such as the human body. They can be unobtrusively applied or even provide information when hidden from view. In the past years various research groups have used this sensor category to create singular applications in this domain. On the following pages we discuss the application of capacitive proximity sensors in smart environments, establishing a classification in comparison to other sensor technologies. We give a detailed overview of the background of this sensing technology and identify specific application domains. Based on existing systems from literature and a number of prototypes we have created in the past years we can specify benefits and limitations of this technology and give a set of guidelines to researchers that are considering this technology in their smart environment applications.