An automated optical biosensor-based immunoassay exploiting surface plasmon resonance detection for the quantitation of aflatoxin M1 (AFM1) in milk and milk powders is described. A monoclonal antibody and an immobilized protein–AFM1 conjugate are utilized in a simple inhibition format following aqueous extraction and immunoaffinity clean-up of the sample, thereby avoiding the need for signal amplification techniques. The sensor surface is stable over multiple regeneration cycles, and the technique yields a method detection limit of 0.1 ng g−1, which is five times lower than the European Commission maximum residue limit. The described antibody-based biosensor technique provides the advantages of quantitative data, automation, and real-time and non-labeled detection of AFM1. The method therefore facilitates routine quantitative threshold-level screening for the identification of potential non-compliance of AFM1 content prior to confirmatory analysis by reference chromatographic methods and may be considered to complement the enzyme-linked immunosorbent assay technique.