Cholera continues to represent a major threat to human health, particularly in developing countries. Death can be readily avoided when medical treatment is rapidly administered. In order to provide a means of detecting the bacterially secreted toxin, we have developed a simple, yet rapid, bioassay for the cholera toxin. The colorimetric bioassay is based on a specifically synthesized lactose derivative that is self-assembled onto gold nanoparticles of 16 nm diameter. In solution the lactose-stabilized nanoparticles are red in color due to the intense surface plasmon absorption band centered at 524 nm. Cholera toxin (added as the B-subunit) (CTB) binds to the lactose derivative and induces aggregation of the nanoparticles. Upon aggregation, the surface plasmon absorption band broadens and red shifts such that the nanoparticle solution appears a deep purple color. The selectivity of the bioassay stems from the thiolated lactose derivative that mimics the GM1 gangliosidethe receptor to which cholera toxin binds in the small intestine. Consequently, added metal ions, anions, and a protein, at relevant concentrations, do not induce nonspecific aggregation of the nanoparticles. The simple color change of the bioassay provides a selective means to detect and quantify the cholera toxin within 10 min. The theoretical limit of detection of the bioassay was determined to be 54 nM (3 µg/mL) for CTB. The stability of the lactose-stabilized nanoparticles was established by freeze-drying and then resuspending the particles in water and subsequently measuring CTB in biologically relevant electrolyte solutions. This colorimetric bioassay provides a new tool for the direct measurement of cholera toxin.