Dynamic psychological processes are most often assessed using self-report instruments. This places a constraint on how often and for how long data can be collected due to the burden placed on human participants. Smartphones are ubiquitous and highly personal devices, equipped with sensors that offer an opportunity to measure and understand psychological processes in real-world contexts over the long term. In this article, we present a novel smartphone approach to address the limitations of self-report in bipolar disorder where mood and activity are key constructs. We describe the development of MoodRhythm, a smartphone application that incorporates existing self-report elements from interpersonal and social rhythm therapy, a clinically validated treatment, and combines them with novel inputs from smartphone sensors. We reflect on lessons learned in transitioning from an existing self-report instrument to one that involves smartphone sensors and discuss the potential impact of these changes on the future of psychological assessment.