The rapid and highly sensitive detection of extremely short-lived nitric oxide (NO) gas generated in vivo by a water-soluble fluorescein derivative is developed. This assay system comprises of indole-3-carboxaldehyde functionalized fluorescein hydrazone (FI) assay which displays a typically high absorption at 492 and 620 nm in the presence of Cu²⁺ and also shows FRET induced fluorescence turn-on exclusively with Cu²⁺. FI selectively detects Cu²⁺ in vivo and in vitro by the “turn-on” mechanism followed by fluorescence “turn-off” with NO gas generated by the lipopolysaccharide (LPS) action. The in vivo experiment performed in the cellular system indicates that FI loaded RAW264.7 cells showed bright fluorescence in the presence of Cu²⁺, while other metals did not influence the FI fluorescence. In addition, the fluorescence of FI–Cu²⁺ was efficiently quenched by NO generated in macrophages through LPS stimulation. FI demonstrates characteristic “turn-on” behavior in the presence of Cu²⁺ via spirolactom ring-opening, while other metals such as Na⁺, K⁺, Ca²⁺, Cr³⁺, Mn²⁺, Fe³⁺, Fe²⁺, Co²⁺, Ni²⁺, Zn²⁺, Cd²⁺, Hg²⁺, and Ag⁺ did not influence FI fluorescence even at very high concentration. Further, the FI–Cu²⁺ complex fluorescence was not quenched with any anions or amino acids but totally quenched by NO and the paramagnetic nature of Cu²⁺ ion converted into the diamagnetic nature when reduced to Cu¹⁺. FI and the FI–Cu²⁺ complex are nontoxic to the cellular system and have high potential for biomedical applications.