A simple "mix-and-detect" type of fluorescence sensor for cholera toxin (CT) is reported. The sensor consists of a BODIPY lipid dye and polydiacetylene (PDA) vesicles and utilizes the lipid insertion and FRET mechanism to offer a direct and fluorescence "turn-on" detection of the analyte. BODIPY conjugated GM1, dissolved in a Tris buffer through aggregate formation, demonstrated substantial fluorescence quenching with addition of PDA vesicle solution. The close proximity of the dye molecules to the conjugated chains as a result of lipid insertion enables energy transfer from dye to the polymer backbone, yielding the observed phenomenon. When CT is present, the binding of BO-GM1 to CT results in formation of a complex that prohibits it from membrane insertion, leading to the blocking of the quenching process. The fluorescence signal was found to be proportional to the CT concentration. The method is very simple and allows specific and sensitive detection of the protein toxin with just a few mixing steps. It can be further developed into a general sensing strategy for detection of other proteins with amplified FRET mechanism.