Treatment with demethylating drugs can induce demethylation and reactivation of abnormally silenced tumor suppressor genes in cancer cells, but it can also induce potentially deleterious loss of methylation of repetitive elements. To enable the observation of unwanted drug effects related to loss of methylation of repetitive DNA, we have developed a novel biosensor capable of reporting changes in DNA accessibility via luminescence, in living cells. The biosensor design comprises two independent modules, each with a polydactyl zinc finger domain fused to a half intein and to a split-luciferase domain that can be joined by conditional protein splicing after binding to adjacent DNA targets. We show that an artificial zinc finger design specifically targeting DNA sequences near the promoter region of the L1PA2 subfamily of Line-1 retroelements is able to generate luminescent signals, reporting loss of epigenetic silencing and increased DNA accessibility of retroelements in human cells treated with the demethylating drugs decitabine or 5-azacytidine.