Apoptosis plays an important role in many physiological and pathological processes. The initiation and execution of the cell death program requires activation of multiple caspases in a stringently temporal order. Here we describe a method that allows real-time observation of caspase activation in situ in live cells based on fluorescent resonance energy transfer (FRET) measurement using the prism and reflector imaging spectroscopy system (PARISS). When a fusion protein consisting of CFP connected to YFP via an intervening caspase substrate that has been targeted to a specific subcellular location is excited with a light source whose wavelength matches the cyan fluorescent protein (CFP) excitation peak, the energy absorbed by the CFP fluorophore is not emitted as fluorescence. Instead, the excitation energy is absorbed by the nearby yellow fluorescent protein (YFP) fluorophore that is covalently linked to CFP through a short peptide containing the caspase substrate. Cleavage of the linker peptide by caspases results in loss of FRET due to the separation of CFP and YFP fluorophores. Using a mitochondrially targeted CFP–caspase 3 substrate–YFP construct (mC3Y), we demonstrate for the first time that there is caspase-3-like activity in the mitochondrial matrix of some cells at very late stage of apoptosis.