The sodium iodide symporter (NIS) mediates iodide (I(-)) transport in the thyroid gland and other tissues and is of increasing importance as a therapeutic target and nuclear imaging reporter. NIS activity in vitro is currently measured with radiotracers and electrophysiological techniques. We report on the development of a novel live cell imaging assay of NIS activity using the I(-)-sensitive and genetically encodable yellow fluorescent protein (YFP) variant YFP-H148Q/I152L. In FRTL-5 thyrocytes stably expressing YFP-H148Q/I152L, I(-) induced a rapid and reversible decrease in cellular fluorescence characterized by 1) high affinity for extracellular I(-) (35 muM), 2) inhibition by the NIS inhibitor perchlorate, 3) extracellular Na(+) dependence, and 4) TSH dependence, suggesting that fluorescence changes are due to I(-) influx via NIS. Individual cells within a population of FRTL-5 cells exhibited a 3.5-fold variation in the rate of NIS-mediated I(-) influx, illustrating the utility of YFP-H148Q/I152L to detect cell-to-cell difference in NIS activity. I(-) also caused a perchlorate-sensitive decrease in YFP-H148Q/I152L fluorescence in COS-7 cells expressing NIS but not in cells lacking NIS. These results demonstrate that YFP-H148Q/I152L is a sensitive biosensor of NIS-mediated I(-) uptake in thyroid cells and in nonthyroidal cells following gene transfer and suggest that fluorescence detection of cellular I(-) may be a useful tool by which to study the pathophysiology and pharmacology of NIS.