Tyrosyl-DNA phosphodiesterase 1 (Tdp1) is a DNA repair enzyme that acts upon protein-DNA covalent complexes. Tdp1 hydrolyzes 3'-phosphotyrosyl bonds to generate 3'-phosphate DNA and free tyrosine in vitro. Mutations in Tdp1 have been linked to patients with spinocerebellar ataxia, and over-expression of Tdp1 results in resistance to known anti-cancer compounds. Tdp1 has been shown to be involved in double-strand break repair in yeast, and Tdp1 has also been implicated in single-strand break repair in mammalian cells. Despite the biological importance of this enzyme and the possibility that Tdp1 may be a molecular target for new anti-cancer drugs, there are very few assays available for screening inhibitor libraries or for characterizing Tdp1 function, especially under pre-steady-state conditions. Here, we report the design and synthesis of a fluorescence-based assay using oligonucleotide and nucleotide substrates containing 3'-(4-methylumbelliferone)-phosphate. These substrates are efficiently cleaved by Tdp1, generating the fluorescent 4-methylumbelliferone reporter molecule. The kinetic characteristics determined for Tdp1 using this assay are in agreement with the previously published values, and this fluorescence-based assay is validated using the standard gel-based methods. This sensitive assay is ideal for kinetic analysis of Tdp1 function and for high-throughput screening of Tdp1 inhibitory molecules.