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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. [ABSTRACT FROM AUTHOR]