Cholera continues to represent a major threat to human health, particularly in developing countries. Death can be readily avoided when medical treatment is rapidly administered. In order to provide a means of detecting the bacterially secreted toxin, we have developed a simple, yet rapid, bioassay for the cholera toxin. The colorimetric bioassay is based on a specifically synthesized lactose derivative that is self-assembled onto gold nanoparticles of 16 nm diameter. In solution the lactose-stabilized nanoparticles are red in color due to the intense surface plasmon absorption band centered at 524 nm. Cholera toxin (added as the B-subunit) (CTB) binds to the lactose derivative and induces aggregation of the nanoparticles. Upon aggregation, the surface plasmon absorption band broadens and red shifts such that the nanoparticle solution appears a deep purple color. The selectivity of the bioassay stems from the thiolated lactose derivative that mimics the GM(1) ganglioside--the receptor to which cholera toxin binds in the small intestine. Consequently, added metal ions, anions, and a protein, at relevant concentrations, do not induce nonspecific aggregation of the nanoparticles. The simple color change of the bioassay provides a selective means to detect and quantify the cholera toxin within 10 min. The theoretical limit of detection of the bioassay was determined to be 54 nM (3 microg/mL) for CTB. The stability of the lactose-stabilized nanoparticles was established by freeze-drying and then resuspending the particles in water and subsequently measuring CTB in biologically relevant electrolyte solutions. This colorimetric bioassay provides a new tool for the direct measurement of cholera toxin.