Development of enzyme inhibitors requires an activity assay for the identification of hits and lead compounds. To determine dissociation constants in a straightforward manner, we explored the use of a genetically encoded fluorescent amino acid for site-specific tagging of the target protein. The unnatural amino acid 7-(hydroxy-coumarin-4-yl) ethylglycine (Hco) was site-specifically incorporated in the target protein by cell-free protein synthesis using an orthogonal amber suppressor tRNA/aminoacyl-tRNA synthetase pair. Using the West Nile virus nonstructural protein 2B-nonstructural protein 3 protease as the target protein, the fluorescence of Hco-tagged samples proved to be exquisitely sensitive to the presence of inhibitors and small ligand molecules if they bind in the vicinity of the Hco residue. No significant change in fluorescence was observed when the ligand-binding site was far from the Hco residue. Hco-tagged proteins thus combine outstanding sensitivity with accurate information on the site of binding, making Hco labeling an attractive tool in drug discovery. © Copyright 2011, Mary Ann Liebert, Inc. 2011.