Proteases are crucial to many biological processes and have become an important field of biomedical and biotechnological research. Engineering of proteases towards therapeutic applications has been limited due to the lack of high-throughput methods for characterization and selection. We have developed a novel high-throughput method for quantitative assessment of proteolytic activity in the cytoplasm of Escherichia coli bacterial cells. The method is based on coexpression of a protease of interest and a reporter complex consisting of an aggregation-prone protein fused to a fluorescent reporter. Cleavage of a substrate sequence situated between the two reporter complex proteins results in increased whole-cell fluorescence proportional to proteolytic activity, which can be monitored using flow cytometry. We have demonstrated that the method can distinguish efficiencies with which Tobacco Etch Virus (TEV) protease processes different substrates. We believe that this is the first method in the field of protease engineering that enables simultaneous measurement of proteolytic activity and protease expression levels and can therefore be applied for substrate profiling, as well as screening and selection of libraries of engineered proteases.