A novel assay system is disclosed for detecting the presence or amount of selected active proteases in biological samples. The assay system utilizes a chimeric protease detector protein composed of three domains: (1) a repressor domain, (2) a protease cleavage domain specific for the protease to be assayed, and a reporter domain. The reporter domain is not detectable when linked to the repressor domain, but becomes detectable upon release from the repressor domain by protease-mediated cleavage. Thus, the activity of the selected protein can be determined by measuring the amount of detectable reporter in the sample. Methods and test kits for using the novel assay system in a variety of in vitro and in vivo applications are also disclosed.