Nitric oxide (NO) plays an essential role within the immune system since it is involved in the break-down of infectious agents such as viruses and bacteria. The ability to measure the presence of NO in the intracellular environment would provide a greater understanding of the pathophysiological mechanism of this important molecule. Here we report the detection of NO from the intracellular phagolysosome using a fluorescently tagged metalloprotein–gold nanoparticle conjugate. The metalloprotein cytochrome c, fluorescently tagged with an Alexa Fluor dye, was self-assembled onto gold nanoparticles to produce a NO specific nanobiosensor. Upon binding of NO, the cytochrome c protein changes conformation which induces an increase of fluorescence intensity of the tagged protein proportional to the NO concentration. The nanobiosensor was sensitive to NO in a reversible and selective manner, and exhibited a linear response at NO concentrations between 1 and 300 μM. In RAW264.7γ NO− macrophage cells, the nanobiosensor was used to detect the presence of NO that had been endogenously generated upon stimulation of the cells with interferon-γ and lipopolysaccharide, or spontaneously released following treatment of the cells with a NO donor. Significantly, the nanobiosensor was shown to be taken up by the macrophages within phagolysosomes, i.e., the precise location where the NO, together with other species, destroys bacterial infection. The nanobiosensor measured, for the first time, increasing concentrations of NO produced during combined stimulation and phagocytosis of Escherichia coli bacteria from within localised intracellular phagolysosomes, a key part of the immune system.