An electronic device includes a portable housing, an optical source carried by the portable housing, and an optical dispersion finger sensor carried by the portable housing. The sensor may include an integrated circuit substrate adjacent the optical source so that light propagates into and is dispersed by the user's finger with at least a portion of the dispersed light exiting the user's finger in a direction toward the integrated circuit substrate. The sensor may also include at least one optical dispersion sensing pixel on the substrate for sensing dispersed light from the user's finger to be used to generate optical dispersion biometric data from the user's finger. A processor may be connected to the one or more sensing pixels to enable at least one device function based upon the optical dispersion biometric data.