Glutathione-mediated biotransformation in the liver is a well-known detoxification process to eliminate small xenobiotics, but its impacts on nanoparticle retention, targeting and clearance are much less understood than liver macrophage uptake, even though both processes are involved in liver detoxification. By designing a thiol-activatable fluorescent gold nanoprobe that can bind to serum protein and be transported to the liver, we non-invasively imaged the biotransformation kinetics in vivo at high specificity and examined this process at the chemical level. Our results show that glutathione efflux from hepatocytes results in high local concentrations of both glutathione and cysteine in liver sinusoids, which transforms the nanoparticle surface chemistry, reduces its affinity to serum protein and significantly alters its blood retention, targeting and clearance. With this biotransformation, liver detoxification, a long-standing barrier in nanomedicine translation, can be turned into a bridge toward maximizing targeting and minimizing nanotoxicity.