Ultrasensitive optical detection of nanometer-scaled particles is highly desirable for applications in early-stage diagnosis of human diseases, environmental monitoring, and homeland security, but remains extremely difficult due to ultralow polarizabilities of small-sized, low-index particles. Optical whispering-gallery-mode microcavities, which can enhance significantly the light-matter interaction, have emerged as promising platforms for label-free detection of nanoscale objects. Different from the conventional whispering-gallery-mode sensing relying on the reactive (i.e., dispersive) interaction, here we propose and demonstrate to detect single lossy nanoparticles using the dissipative interaction in a high-Q toroidal microcavity. In the experiment, detection of single gold nanorods in an aqueous environment is realized by monitoring simultaneously the linewidth change and shift of the cavity mode. The experimental result falls within the theoretical prediction. Remarkably, the reactive and dissipative sensing methods are evaluated by setting the probe wavelength on and off the surface plasmon resonance to tune the absorption of nanorods, which demonstrates clearly the great potential of the dissipative sensing method to detect lossy nanoparticles. Future applications could also combine the dissipative and reactive sensing methods, which may provide better characterizations of nanoparticles.