Nipah virus (NiV) is a new zoonotic paramyxovirus that emerged in 1998 and is now classified in the genus Henipavirus along with the closely related Hendra virus (HeV). NiV is highly pathogenic in several vertebrate species including humans, and the lack of available vaccines or specific treatment restricts it to biosafety level 4 (BSL4) containment. A serum neutralization test was developed for measuring NiV neutralizing antibodies under BSL2 conditions using a recombinant vesicular stomatitis virus (VSV) expressing green fluorescent protein (GFP) and bearing the F and G proteins of NiV (VSV-NiV-GFP). The neutralization titers were obtained by counting GFP-expressing cells or by measuring fluorescence. The performance of this new assay was compared against the conventional test using live NiV with panels of sera from several mammalian species, including sera from NiV outbreaks, experimental infections, as well as HeV-specific sera. The results obtained with the VSV-NiV-GFP based test correlated with those obtained using live NiV. Using a 50% reduction in VSV-NiV-GFP infected cells as the cut-off for neutralization, this new assay demonstrated its potential as an effective tool for detecting NiV neutralizing antibodies under BSL2 containment with greater speed, sensitivity and safety as compared to the conventional NiV serum neutralization test.