Molecular beacons represent a new family of fluorescent probes for nucleic acids, and have found broad applications in recent years due to their unique advantages over traditional probes. Detection of nucleic acids using molecular beacons has been based on hybridization between target molecules and molecular beacons in a 1:1 stoichiometric ratio. The stoichiometric hybridization, however, puts an intrinsic limitation on detection sensitivity, because one target molecule converts only one beacon molecule to its fluorescent form. To increase the detection sensitivity, a conventional strategy has been target amplification through polymerase chain reaction. Instead of target amplification, here we introduce a scheme of signal amplification, nicking enzyme signal amplification, to increase the detection sensitivity of molecular beacons. The mechanism of the signal amplification lies in target-dependent cleavage of molecular beacons by a DNA nicking enzyme, through which one target DNA can open many beacon molecules, giving rise to amplification of fluorescent signal. Our results indicate that one target DNA leads to cleavage of hundreds of beacon molecules, increasing detection sensitivity by nearly three orders of magnitude. We designed two versions of signal amplification. The basic version, though simple, requires that nicking enzyme recognition sequence be present in the target DNA. The extended version allows detection of target of any sequence by incorporating rolling circle amplification. Moreover, the extended version provides one additional level of signal amplification, bringing the detection limit down to tens of femtomolar, nearly five orders of magnitude lower than that of conventional hybridization assay.