The authors describe a homogeneous, high-throughput screening (HTS) assay for measuring protease activity and detection of inhibitors. The assay comprises a cyclic β-galactosidase (β-gal) enzyme donor peptide (ED) containing a protease-selective cleavage sequence. Alone, the cyclic peptide is inactive, but when linearized following protease cleavage, ED complements with β-gal enzyme acceptor forming active β-gal enzyme. This then catalyzes the formation of either fluorescent or chemiluminescent products, with β-gal turnover providing a highly amplified signal, and thus an assay technology of high sensitivity. To demonstrate the utility of the technology, an EFC assay was developed to measure the activity of 2, caspase 3 and β-secretase. Using a cyclic ED containing the caspase 3 substrate sequence, DEVD, the EFC assay signal was linear with respect to caspase 3 concentration. The assay was very sensitive, being able to detect activity at low picogram amounts of caspase 3. For the β-secretase (BACE) EFC assay, a cyclic ED containing the Swedish mutant cleavage site of amyloid precursor protein (APP), SEVNLDAEFK, was used. In a similar fashion to the caspase 3 assay, the signal induced by BACE activity was linear with respect to enzyme concentration and was highly sensitive, being able to detect nanogram quantities of BACE. The assay was also more sensitive than a commercially available FRET-based assay of BACE activity. It is concluded that the EFC protease assay is a simple, flexible, and sensitive technology for HTS of proteases.