Non-invasive real time quantification of cellular protease activity allows monitoring of enzymatic activity and identification of activity modulators within the protease's natural milieu. We developed a protease-activity assay based on differential localization of a recombinant reporter consisting of a Golgi retention signal and a protease cleavage sequence fused to alkaline phosphatase (AP). When expressed in mammalian cells, this protein localizes to Golgi bodies and, upon protease mediated cleavage, AP translocates to the extracellular medium where its activity is measured. We used this system to monitor the Golgi-associated protease furin, a pluripotent enzyme with a key role in tumorigenesis, viral propagation of avian influenza, ebola, and HIV, and in activation of anthrax, pseudomonas, and diphtheria toxins. This technology was adapted for high throughput screening of 30,000 compound small molecule libraries, leading to identification of furin inhibitors. Further, this strategy was utilized to identify inhibitors of another Golgi protease, the β-site APP-cleaving enzyme (BACE). BACE cleavage of the amyloid precursor protein leads to formation of the Aβ peptide, a key event that leads to Alzheimer's disease. In conclusion, we describe a customizable, non-invasive technology for real time assessment of Golgi protease activity used to identify inhibitors of furin and BACE.