The SARS-CoV-2 main protease, Mpro, is critical for its replication and is an appealing target for designing anti-SARS-CoV-2 agents. In this regard, a number of assays have been developed based on its cleavage sequence preferences to monitor its activity. These include the usage of Fluorescence Resonance Energy Transfer (FRET)-based substrates in vitro and a FlipGFP reporter, one which fluoresces after Mpro-mediated cleavage, in live cells. Here, we have engineered a pair of genetically encoded, Bioluminescence Resonance Energy Transfer (BRET)-based sensors for detecting SARS-CoV-2 Mpro proteolytic activity in living host cells as well as in vitro assays. The sensors were generated by sandwiching Mpro N-terminal autocleavage sites, either AVLQSGFR (short) or KTSAVLQSGFRKME (long), in between the mNeonGreen and nanoLuc proteins. Co-expression of the sensor with the Mpro in live cells resulted in its cleavage in a dose- and time-dependent manner while mutation of the critical C145 residue (C145A) in Mpro completely abrogated the sensor cleavage. Importantly, the BRET-based sensors displayed increased sensitivities and specificities as compared to the recently developed FlipGFP-based Mpro sensor. Additionally, the sensors recapitulated the inhibition of Mpro by the well-characterized pharmacological agent GC376. Further, in vitro assays with the BRET-based Mpro sensors revealed a molecular crowding-mediated increase in the rate of Mpro activity and a decrease in the inhibitory potential of GC376. The sensor developed here will find direct utility in studies related to drug discovery targeting the SARS-CoV-2 Mpro and functional genomics application to determine the effect of sequence variation in Mpro.