Caenorhabditis elegans has become an important model organism within biology. The transparent gut, rapid growing time and ability to create a defined gut microbiota make it an ideal candidate organism for understanding and engineering the host microbiota. Here we present the development of an experimental model which can be used to help characterise whole-cell bacterial biosensors in vivo. A dual-plasmid biosensor system responding to IPTG was developed and fully characterised in vitro. Subsequently, we developed an automated image analysis pipeline and showed the sensor was capable of detecting and reporting on changes in the intestinal environment of C. elegans, after introducing exogenous biosensor inducer into the environment. The protocols presented here may be used for aiding the rational design of engineered bacterial circuits, primarily for diagnostic applications. In addition, the model system may serve to reduce the use of current animal models and aid in the exploration of complex questions within general nematode and host-microbe biology.