The encephalitic alphaviruses encode nsP2 protease (nsP2pro), which because of its vital role in virus replication, represents an attractive target for therapeutic intervention. To facilitate the discovery of nsP2 inhibitors we have developed a novel assay for quantitative measurement of nsP2pro activity in a cell-based format. The assay is based on a substrate fusion protein consisting of eGFP and Gaussia luciferase (Gluc) linked together by a small peptide containing a VEEV nsp2pro cleavage sequence. The expression of the substrate protein in cells along with recombinant nsP2pro results in cleavage of the substrate protein resulting in extracellular release of free Gluc. The Gluc activity in supernatants corresponds to intracellular nsP2pro-mediated substrate cleavage; thus, providing a simple and convenient way to quantify nsP2pro activity. Here, we demonstrate potential utility of the assay in identification of nsP2pro inhibitors, as well as in investigations related to molecular characterization of nsP2pro.