If biosurfactants are to achieve their promise in environmental oil-spill remediation, their toxicity to marine life must be assessed. A killifish larvae assay is commonly used as a measure of toxicity but is difficult and nonlinear in response. Red blood cell (RBC) hemolysis has also been the basis for assays of some surfactant levels. Here we present a modified sheep RBC suspension assay and compare its response to that of the fish assay for surfactin and its genetically modified variant fatty-acyl-glutamate (FA-Glu). This is the first report of hemolytic activity as a property of FA-Glu. The method's potential for screening for toxicity against marine organisms is demonstrated.