Development of suitable tools to assess enzyme activity directly from their complex cellular environment has a dramatic impact on understanding the functional roles of proteins as well as on the discovery of new drugs. In this study, a novel fluorescence-based chemosensor strategy for the direct readout of dipeptidase activities within intact living cells is described. Selective activity-based probes were designed to sense two important type II transmembrane serine proteases, fibroblast activation protein (FAP) and dipeptidyl peptidase IV (DPP-IV). These serine proteases have been implicated in diverse cellular activities, including blood coagulation, digestion, immune responses, wound healing, tumor growth, tumor invasion, and metastasis. Here, we validated that Ac-GPGP-2SBPO and GPGP-2SBPO probes are excellent reporters of both proteolytic activities. Furthermore, the novel probes can differentiate between FAP and DPP-IV proteolytic activities in cellular assay. Potentially, this assay platform is immediately useful for novel drug discovery.