Proteases are essential for regulating a wide range of physiological and pathological processes. The imbalance of protease activation and inhibition will result in a number of major diseases including cancers, atherosclerosis, and neurodegenerative diseases. Although fluorescence resonance energy transfer (FRET)-based protease probes, a small molecular dye and other methods are powerful, they still have drawbacks or limitations for providing significant information about the dynamics and pattern of endogenous protease activation and inhibition in a single living cell or in vivo. Currently protease sensors capable of quantitatively measuring specific protease activity in real time and monitoring activation and inhibition of enzymatic activity in various cellular compartments are highly desired. In this dissertation, we report a novel strategy to create protease sensors by grafting an enzymatic cleavage linker into a sensitive location for changing chromophore properties of enhanced green fluorescent protein (EGFP) following protease cleavage, which can be used to determine protease activity and track protease activation and inhibition with a ratiometric measurement mode in living cells. Our designed protease sensors exhibit large relative ratiometric optical signal change in both absorbance and fluorescence, and fast response to proteases. Meanwhile, these protease sensors exhibiting high enzymatic selectivity and kinetic responses are comparable or better than current small peptide probes and FRET-based protease probes. Additionally, our protease sensors can be utilized for real-time monitoring of cellular enzymogen activation and effects of inhibitors in living cells. This novel strategy opens a new avenue for developing specific protease sensors to investigate enzymatic activity in real time, to probe disease mechanisms corresponding to proteases in vitro and in vivo, and to screen protease inhibitors with therapeutic effects. Strong fluorescence was still retained in the cleaved EGFP-based protease sensors, which stimulated us to identify the EGFP fragment with fluorescence properties for further understanding chromophore formation mechanisms and investigating protein-protein interactions through fluorescence complementation of split EGFP fragments. Through fusing EF-hand motifs from calbindin D9k to split EGFP fragments, a novel molecular probe was developed to simultaneously track the calcium change or calcium signaling pathways and calcium-dependent protein-protein interaction in living cells in real time.