Controlled drug delivery and real-time tracking of drug release in cancer cells are essential for cancer therapy. Herein, we report a protease-responsive prodrug (DOX-FCPPs-PyTPE, DFP) with aggregation-induced emission (AIE) characteristics for controlled drug delivery and precise tracking of drug release in living cells. DFP consists of three components: AIE-active tetraphenylethene (TPE) derivative PyTPE, functionalized cell penetrating peptides (FCPPs) containing a cell penetrating peptide (CPP) and a short protease-responsive peptide (LGLAG) that can be selectively cleaved by a cancer-related enzyme matrix metalloproteinase-2 (MMP-2), and a therapeutic unit (doxorubicin, DOX). Without MMP-2, this prodrug cannot go inside the cells easily. In the presence of MMP-2, DFP can be cleaved into two parts. One is cell penetrating peptides (CPPs) linked DOX, which can easily interact with cell membrane and then go inside the cell with the help of CPPs. Another is the PyTPE modified peptide which will self-aggregate because of the hydrophobic interaction and turn on the yellow fluorescence of PyTPE. The appearance of the yellow fluorescence indicates the release of the therapeutic unit to the cells. The selective delivery of the drug to the MMP-2 positive cells was also confirmed by using the intrinsic red fluorescence of DOX. Our result suggests a new and promising method for controlled drug delivery and real-time tracking of drug release in MMP-2 overexpression cells.