We describe a novel assay that permits measurement of entry of murine leukemia virus and pseudotypes with greater sensitivity and more rapidly than previously possible. To achieve this, we encapsulated a sensitive reporter enzyme, luciferase, directly into fully infectious, intact viral particles. The enzyme is specifically targeted to the viral lumen, as a C-terminal fusion on the viral envelope protein. Only when the incorporated luciferase is released from the viral lumen and gains access to its substrates is light emitted and readily detected. When cells are perfused with luciferin, quantitative measurements of entry can be made in real time on live cells. Uniquely, the amount of cell-bound virus can be determined in the same assay by addition of detergent to expose the luciferase. We demonstrate that virus carrying a mutation in the fusion peptide binds normally to cells but is unable to infect them and gives no entry signal. Using this assay, we show that inhibitors of endosomal acidification inhibit signal from vesicular stomatitis virus pseudotypes but not murine leukemia virus, consistent with a pH-independent mode of entry for the latter virus. Additionally, the fusion kinetics are rapid, with a half-life of 25 min after a delay of 10 to 15 min. The future use of this assay will permit a detailed examination of the entry mechanism of viruses and provide a convenient platform to discover novel entry inhibitors. The design also permits packaging of potential therapeutic protein cargoes into functional virus particles and their specific delivery to cellular targets.