A novel biomarker was developed in Daphnia magna to detect organic pollution in groundwater. The haem peroxidase assay, which is an indirect means of measuring oxidase activity, was particularly sensitive to kerosene contamination. Exposure to sub-lethal concentrations of kerosene-contaminated groundwater resulted in a haem peroxidase activity increase by dose with a two-fold activity peak at 25%. Reproduction in D. magna remained unimpaired when exposed to concentrations below 25% for 21 days, and a decline in fecundity was only observed at concentrations above the peak in enzyme activity. The measurement of haem peroxidase activity in D. magna detected sublethal effects of kerosene in just 24 h, whilst offering information on the health status of the organisms. The biomarker may be useful in determining concentrations above which detrimental effects would occur from long-term exposure for fuel hydrocarbons. Moreover, this novel assay detects exposure to chemicals in samples that would normally be classified as non-toxic by acute toxicity tests.