To date, several principal methods are presently used to monitor the autophagic process, but they have some potential experimental pitfalls or limitations that make them not applicable to living cells. In order to improve on the currently developed detection methods for autophagy, we report here fluorescent peptide-conjugated polymeric nanoparticles loaded with a lysosome staining dye in their core. The fluorescent peptide is designed to be specifically cleaved by the Atg4 cysteine protease, which plays a crucial role in autophagy activation. In this study, we demonstrate that peptide-conjugated polymeric nanoparticles can be used to visualize Atg4 activity in both cell-free and cell culture systems. The fluorescence imaging of cells incubated with nanoparticles demonstrates that Atg4 activity is activated in the autophagy-induced conditions, but suppressed in the autophagy-inhibited conditions. These results indicate that Atg4 activity is correlated with autophagic flux through its own regulatory pathway. Therefore, our strategy provides an alternative detection method that can clearly distinguish between an “autophagy active” and “autophagy inactive” state in cultured cells. As our nanoparticles are highly cell-permeable and biocompatible, this detection system has general applicability to living cells and can be extended to cell-based screening to evaluate newly developed compounds.