Methods and kits for assessing proteolytic enzyme activity and a modulator's effect thereof employ a Ubiquitin or Ubiquitin-like Protein and a signal producing structure. The corresponding fusion polynucleotide is employed for production of transgenic cells, plants and animals that may be produced by stably transfection, optionally transforming the cell, plant or animal with a Ubiquitin-, UBL- or their C-terminal binding functional fragment-Reporter fusion polynucleotide. A method of diagnosing a disease or condition, comprises contacting or administering a sample obtained from a subject suspected of being afflicted with the disease or condition with the cell, plant or animal, detecting any signal produced by the reporter in the presence of the sample and comparing the signal to controls for 0% and 100% signals.