Droplet-based microfluidic systems are a powerful tool for biological assays with high throughput. Water-in-oil droplets (WODLs) are typically used in droplet-based microfluidic systems to culture microorganisms and perform enzyme assays. However, because of the oil surrounding the nanoliter and picoliter volumes of WODLs, availability of suitable substrates is limited. For instance, although 7-amino-4-methylcoumarin (AMC) is commonly used as a fluorescent probe of the substrate to detect peptidase activity, AMC leaks from WODLs to the oil phase due to its high hydrophobicity. Thus, AMC substrates cannot be used in droplet-based microfluidic systems with WODLs. In this study, we developed a peptidase substrate consisting of a dipeptide and 7-aminocoumarin-4-acetic acid (ACA), an AMC-derived fluorogenic compound. ACA was retained in the WODL for more than 7 days, and the dipeptidyl ACA substrate detected dipeptidyl peptidase (DPP) activity in the WODL. Compared to AMC substrates, the substrate specificity constants of DPPs for ACA substrates increased up to 4.7-fold. Fluorescence-activated droplet sorting made high-throughput screening of microorganisms based on DPP activity using the dipeptidyl ACA substrate possible. Since ACA could be applied to various substrates as a fluorescent probe, detectable microbial enzyme activities for droplet-based microfluidic systems can be largely expanded.