Synthetic biology has enabled the development of powerful nucleic acid diagnostic technologies for detecting pathogens and human health biomarkers. Here we expand the reach of synthetic biology-enabled diagnostics by developing a cell-free biosensing platform that uses RNA output sensors activated by ligand induction (ROSALIND) to detect harmful contaminants in aqueous samples. ROSALIND consists of three programmable components: highly-processive RNA polymerases, allosteric transcription factors, and synthetic DNA transcription templates. Together, these components allosterically regulate the in vitro transcription of a fluorescence-activating RNA aptamer:in the absence of a target compound, transcription is blocked, while in its presence a fluorescent signal is produced. We demonstrate that ROSALIND can be configured to detect a range of water contaminants, including antibiotics, toxic small molecules, and metals. Our cell-free biosensing platform, which can be freeze-dried for field deployment, creates a new capability for point-of-use monitoring of molecular species to address growing global crises in water quality and human health.