Influenza viruses have been responsible for the largest pandemics in the previous century. Although vaccination and prophylactic antiviral therapeutics are the primary defense against influenza virus, there is a pressing need to develop new antiviral agents to circumvent the limitations of current therapies. The endonuclease activity of the influenza virus PA(N) protein is essential for virus replication and is a promising target for novel anti-influenza drugs. To facilitate the discovery of endonuclease inhibitors, we have developed a high-throughput fluorescence polarization (FP) assay, utilizing a novel fluorescein-labeled compound (K(d) = 0.378 μM) and a PA(N) construct, to identify small molecules that bind to the PA(N) endonuclease active site. Several known 4-substituted 2,4-dioxobutanoic acid inhibitors with high and low affinities have been evaluated in this FP-based competitive binding assay, and there was a general correlation between binding and the reported inhibition of endonuclease activity. Additionally, we have demonstrated the utility of this assay for identifying endonuclease inhibitors in a small diverse targeted fragment library. These fragment hits were used to build a follow-up library that that led to new active compounds that demonstrate FP binding and anti-influenza activities in plaque inhibition assays. The assay offers significant advantages over previously reported assays and is suitable for high-throughput and fragment-based screening studies. Additionally the demonstration of the applicability of a mechanism-based "targeted fragment" library supports the general potential of this novel approach for other enzyme targets. These results serve as a sound foundation for the development of new therapeutic leads targeting influenza endonuclease.