Measurement of protease activity in living cells or organisms remains a challenging task. We here present a transgene-encoded biosensor that reports the proteolytic activity of caspase-1 in the course of inflammasome activation and that of other proteases in a highly sensitive and specific manner. This protease reporter is based on the biological activity of a pro-interleukin (IL)-1β-Gaussia luciferase (iGLuc) fusion construct, in which pro-IL-1β-dependent formation of protein aggregates renders GLuc enzyme inactive. Cleavage leads to monomerization of this biosensor protein, resulting in a strong gain in luciferase activity. Exchange of the canonical caspase-1 cleavage site in this reporter construct allows the generation of protease biosensors with additional specificities. The high sensitivity, signal-to-background ratio and specificity of the iGLuc system renders it a useful tool to study proteolytic events in mouse and human cells at high throughput and to monitor protease activity in mice in vivo.