Gold nanoparticles (GNPs) with a monolayer of peptides were synthesized as a potential tumour activated cancer drug delivery system. The prodrug system was achieved by the attachment of two varying lengths of peptides to GNPs: An 18 amino acid peptide sequence encompassing a shorter fluorescent labelled (coumarin) six amino acid peptide sequence. The longer peptide chain included the sequence D-AFK that is selectively cleavable by the over-expression of proteases in the vicinity of cancer cells. The protease-mediated exposure of the coumarin was demonstrated by the incubation of peptide capped GNPs with adenocarcinomic human alveolar basal epithelial A549 cells and madin-darby bovine kidney epithelial cells. Confocal laser scanning microscopy studies revealed enhanced fluorescence emission intensities in the cancer cell line as compared to the intensity exhibited by the healthy cell line. This work suggests that GNPs functionalised with a cytotoxic agent or fluorophore encapsulated by longer peptide strands may find useful applications for development of GNPs with therapeutic or diagnostic studies.