We have developed an experimental strategy to monitor protein interactions in a cell with a high degree of selectivity and sensitivity. A transcription factor is tethered to a membrane-bound receptor with a linker that contains a cleavage site for a specific protease. Activation of the receptor recruits a signaling protein fused to the protease that then cleaves and releases the transcription factor to activate reporter genes in the nucleus. This strategy converts a transient interaction into a stable and amplifiable reporter gene signal to record the activation of a receptor without interference from endogenous signaling pathways. We have developed this assay for three classes of receptors: G protein-coupled receptors, receptor tyrosine kinases, and steroid hormone receptors. Finally, we use the assay to identify a ligand for the orphan receptor GPR1, suggesting a role for this receptor in the regulation of inflammation.