The microbiome-produced enzyme bile salt hydrolase (BSH) plays a central role in human health, but its function remains unclear due to the lack of suitable methods for measuring its activity. Here, we have developed a novel optical tool based on ultrasensitive bioluminescent imaging and demonstrated that this assay can be used for quick and cost-effective quantification of BSH activity across a broad range of biological settings including pure enzymes and bacteria, intact fecal slurries, and noninvasive imaging in live animals, as well as for the assessment of BSH activity in the entire gastrointestinal tract of mice and humans. Using this assay, we showed that certain types of prebiotics are capable of increasing BSH activity of the gut microbiota in vivo and successfully demonstrated potential application of this assay as a noninvasive diagnostic test to predict the clinical status of inflammatory bowel disease (IBD) patients.