Two squaraine (SQ) dyes, N-propanesulfonate-benzothiazolium squaraine (SQ-1) and N-propanesulfonate-benzoindolium squaraine (SQ-2), were synthesized with sulfonate groups to increase water solubility. Both dyes are almost nonfluorescent in aqueous solution with fluorescent quantum yields of 0.03, but exhibited fluorescence enhancement after noncovalently binding with bovine serum albumin (BSA). Upon addition of BSA, the fluorescence intensity increased by ca. a factor of 10, along with a 10-fold extension in the fluorescence lifetime. SQ-1 and SQ-2 interacted with BSA efficiently and appeared to show a preference for binding at site II, which involves combinational effects of electrostatic and hydrophobic interactions. The fluorogenic squaraine dyes were then used to label BSA, forming BSA-based nanoparticles (NPs) through noncovalent binding. The resulting BSA-SQ NPs exhibited enhanced near-IR fluorescence and reduced aggregation of the squaraine moiety. The BSA-SQ NPs were used for cell incubation and bioimaging studies. Confocal fluorescent images were obtained for HCT 116 cells incubated with the BSA-SQ NPs and LysoSensor Green, demonstrating the utility of the NP probes for intracellular imaging. This strategy ovecomes the generally low fluorescence emission of SQ dyes in water and aggregation-reduced fluorescence, providing a versatile strategy for sensing and imaging in biological environments.