The phage amplified biologically assay is a new method for rapid and low-cost phenotypic determination of the drug sensitivities of Mycobacterium tuberculosis isolates and the detection of viable organisms in patient specimens. Infection of slowly growing mycobacteria with phage (phage D29) was followed by chemical virucide destruction of extracellular phage. Infected mycobacteria were mixed in culture with rapidly growing sensor cells, which the phage can also infect; i.e., lytic amplification of phage occurs. The aims of the present study were to optimize the speed and sensitivity of the assay and reduce its cost for developing countries by using an M. tuberculosis-spiked sputum model with (i) identification of inhibitory components of sputum and optimization of decontamination methods; (ii) simplification of the washing and development steps; (iii) reduction of the use of high-cost components, e.g., oleate-albumin-dextrose-catalase (OADC) supplement; and (iv) optimization of virucide treatment. The following results were obtained. (i) An inhibitory factor in sputum which could be removed by treatment of the sample with sodium dodecyl sulfate or NaOH decontamination was identified. (ii) A microcentrifuge-based approach with thixotropic silica as a bedding and resuspension agent was developed as an alternative to conventional centrifugation medium exchange. The yield was increased 228-fold, with increased speed and reduced cost. (iii) At present, after extracellular inactivation of phage, the ferrous ammonium sulfate (FAS) virucide is sequestered by dilution with an expensive supplement, OADC. Sodium citrate with calcium chloride was found to be a cost-effective after treatment with the FAS protectant and offered greater protection than OADC. Kinetic-lysis experiments indicated that an infection time of 1 to 3 h prior to FAS addition was optimal. (iv) Amplification of the signal (which corresponded to the burst size) was shown by allowing lysis prior to plating in a spiked medium model (up to 20-fold) and a spiked sputum model (up to 10-fold). A liquid culture detection method capable of detecting approximately 60 viable M. tuberculosis organisms in 1 ml of sputum was developed. Taken together, these improvements support the routine application of the assay to sputum specimens.