An optical whole-cell biosensor based on a genetically engineered bioluminescent catabolic reporter bacterium was developed for continuous on-line monitoring of naphthalene and salicylate bioavailability and microbial catabolic activity potential in waste streams. The bioluminescent reporter bacterium, Pseudomonas fluorescens HK44, carries a transcriptional nahG-luxCDABE fusion for naphthalene and salicylate catabolism. Exposure to either compound resulted in inducible bioluminescence. The reporter culture was immobilized onto the surface of an optical light guide by using strontium alginate. This biosensor probe was then inserted into a measurement cell which simultaneously received the waste stream solution and a maintenance medium. Exposure under defined conditions to both naphthalene and salicylate resulted in a rapid increase in bioluminescence. The magnitude of the response and the response time were concentration dependent. Good reproducibility of the response was observed during repetitive perturbations with either naphthalene or salicylate. Exposure to other compounds, such as glucose and complex nutrient medium or toluene, resulted in either minor bioluminescence increases after significantly longer response times compared with naphthalene or no response, respectively. The environmental utility of the biosensor was tested by using real pollutant mixtures. A specific bioluminescence response was obtained after exposure to either an aqueous solution saturated with JP-4 jet fuel or an aqueous leachate from a manufactured-gas plant soil, since naphthalene was present in both pollutant mixtures.