The utility of small molecules to probe or perturb biological systems is limited by the lack of cell-specificity. "Masking" the activity of small molecules using a general chemical modification and "unmasking" it only within target cells overcomes this limitation. To this end, we have developed a selective enzyme-substrate pair consisting of engineered variants of E. coli nitroreductase (NTR) and a 2-nitro- N-methylimidazolyl (NM) masking group. To discover and optimize this NTR-NM system, we synthesized a series of fluorogenic substrates containing different nitroaromatic masking groups, confirmed their stability in cells, and identified the best substrate for NTR. We then engineered the enzyme for improved activity in mammalian cells, ultimately yielding an enzyme variant (enhanced NTR, or eNTR) that possesses up to 100-fold increased activity over wild-type NTR. These improved NTR enzymes combined with the optimal NM masking group enable rapid, selective unmasking of dyes, indicators, and drugs to genetically defined populations of cells.