In this paper, we demonstrate the incorporation of dye-based liquid lasers within or around flowing aqueous microfluidic droplets. In particular, we use dye solutions in benzyl alcohol, and either disperse an ensemble of small (∼20 μm) lasing droplets within large (∼500 μm) aqueous droplets flowing in a simple glass capillary-based microfluidic device, or ‘wrap’ a thin (∼10 μm) lasing benzyl alcohol shell around larger (∼560 μm) microfluidic aqueous droplets. We experimentally and theoretically characterize the lasing behavior in both cases, which is supported by whispering-gallery mode (WGM) optical resonances at the droplet interfaces. We showcase a simple application of our method, which highlights the advantages of having embedded, spatially segregated laser sources within a droplet containing a model analyte solution. With this method, each microfluidic droplet now functions not only as an isolated experiment flask, but is also capable of on drop sensing that exploits WGM-based lasing, thus expanding the possibilities for online monitoring of biophysical/biochemical processes and sensitive detection of biomolecules in droplet-based microfluidics.