The prion protein (PrP) is a cell surface protein that in disease misfolds and becomes infectious causing Creutzfeldt-Jakob disease in humans, scrapie in sheep, and chronic wasting disease in deer and elk. Little is known regarding the dimerization of PrP and its role in disease. We developed a bioluminescent prion assay (BPA) to quantify PrP dimerization by bimolecular complementation of split Gaussia luciferase (GLuc) halves that are each fused to PrP. Fusion constructs between PrP and N- and C-terminal GLuc halves were expressed on the surface of RK13 cells (RK13-DC cells) and dimerized to yield a bioluminescent signal that was decreased in the presence of eight different antibodies to PrP. Dimerization of PrP was independent of divalent cations and was induced under stress. Challenge of RK13-DC cells with seven different prion strains did not lead to detectable infection but was measurable by bioluminescence. Finally, we used BPA to screen a compound library for compounds inhibiting PrP dimerization. One of the most potent compounds to inhibit PrP dimerization was JTC-801, which also inhibited prion replication in RML-infected ScN2a and SMB cells with an EC50 of 370 nM and 220 nM, respectively. We show here that BPA is a versatile tool to study prion biology and to identify anti-prion compounds.