Botulinum neurotoxins (BoNTs) act as zinc-dependent endopeptidases that cleave proteins required for neurotransmitter release. To detect toxin activity, fragments of the toxin substrate proteins, synaptobrevin (Syb) or synaptosome-associated protein of 25 kDa (SNAP-25), were used to link cyan fluorescent protein (CFP) to yellow fluorescent protein (YFP). Cleavage of these fusion proteins by BoNTs abolished fluorescence resonance energy transfer between the CFP and YFP, providing a sensitive means to detect toxin activity in real-time in vitro. Furthermore, using full-length SNAP-25 and Syb as the linkers, we report two fluorescent biosensors that can detect toxin activity within living cells. Cleavage of the SNAP-25 fusion protein abolished fluorescence resonance energy transfer between CFP and YFP, and cleavage of Syb resulted in spatial redistribution of YFP fluorescence in cells. This approach provides a means to carry out cell-based screening of toxin inhibitors and to study toxin activity in situ. By using these biosensors, we found that the subcellular localizations of SNAP-25 and Syb are critical for efficient cleavage by BoNT/A and B, respectively.