Oxygen is essential for aerobic life and is required for various oxygen-dependent biochemical reactions. In addition, oxygen plays important roles in multiple intracellular signaling pathways. Thus, to investigate oxygen homeostasis in living cells, we developed a genetically encoded oxygen sensor protein using the oxygen sensor domain of bacterial phosphodiesterase direct oxygen sensor protein (DosP), which was connected to yellow fluorescence protein (YFP) using an optimized antiparallel coiled-coil linker. The resulting ANA-Y (Anaerobic/aerobic sensing yellow fluorescence protein) was highly sensitive to oxygen and had a half saturation concentration of 18 μM. The ANA-Y reacts with dissolved oxygen within 10 s and the resulting increases in fluorescence are reversed with decreases in oxygen concentrations. This sensitivity of the ANA-Y enabled direct determinations of initial photosynthetic oxygen production by cyanobacteria. ANA-Y exhibits reversible fluorescence change of donor YFP following reversible absorbance change of acceptor DosH, and the operating mechanism of this ANA-Y could be used to develop various protein sensor probes for intracellular signaling molecules using natural sensor proteins.