Plasmonic coupling between fluorophores and metal surfaces has become a focal point of optical research during the last two decades, however, the interactions of FRET couples with metal surfaces remain relatively unexplored. In this study, interactions of the tryptophan–Tb3+ FRET pair with silver nanoprisms for potential biosensor development have been investigated. For this purpose an engineered lanthanide binding peptide (LBTtrp) containing tryptophan as the sensitizer for bound lanthanide ions (Tb3+) as well as a trypsin cleavage site was synthesized. The modified LBTtrp peptide contained two N-terminal cysteine residues to provide a stronger coupling to the silver nanoprisms (∼6 nm high, ∼50 nm wide). This study investigated the interaction between tryptophan, chelated Tb3+ ions, and silver nanoprisms in solution using fluorescence and transient absorption spectroscopy. We have found that Tb3+ luminescence decreases upon binding of the LBTtrp–Tb3+ to silver nanoprisms and increases upon trypsin cleavage. The transient absorption spectroscopy measurements showed a significant decrease in the lifetime of the excited singlet state of tryptophan upon Tb3+ chelation, while coupling to the silver nanoprisms did not show a significant effect on tryptophan. The results obtained in this work demonstrate a first proof of concept for a new sensitive optical biosensor in solution.