To fill the need for environmentally sensitive fluorescent unnatural amino acids able to operate in the red region of the spectrum, we have designed and synthesized Alared, a red solvatochromic and fluorogenic amino acid derived from the Nile Red chromophore. The new unnatural amino acid can be easily integrated into bioactive peptides using classical solid-phase peptide synthesis. The fluorescence quantum yield and the emission maximum of Alared-labeled peptides vary in a broad range depending on the peptide's environment, making Alared a powerful reporter of biomolecular interactions. Due to its red-shifted absorption and emission spectra, Alared-labeled peptides could be followed in living cells with minimal interference from cellular autofluorescence. Using ratiometric fluorescence microscopy, we were able to track the fate of the Alared-labeled peptide agonists of the apelin G protein-coupled receptor upon receptor activation and internalization. Due to its color-shifting environmentally sensitive emission, Alared allowed for distinguishing the fractions of peptides that are specifically bound to the receptor or unspecifically bound to different cellular membranes.