New analytical diagnostic techniques that are based on signal-amplification mechanisms could significantly improve the sensitivity of detection of various analytes. We have developed a new approach to achieving exponential amplification of a diagnostic signal through a two-component dendritic chain reaction. The chain reaction generated the analyte of interest and thereby initiated additional diagnostic cycles. The system was designed for the detection of hydrogen peroxide and produced significantly larger intensity of diagnostic signal than a classic probe. In addition, a mathematical model that simulates the disassembly kinetics of one-component and two-component reactions was developed and shown to correlate well with the observed experimental data. The modularity and flexibility of a two-component detection system should allow extension to the detection of other analytes.