Split reporter-based bioluminescence imaging is a useful strategy for studying protein-protein as well as other intracellular interactions. We have used a combinatorial strategy to identify a novel split site for firefly luciferase with improved characteristics over previously published split sites. A combination of fragments with greater absolute signal with near-zero background signals was achieved by screening 115 different combinations. The identified fragments were further characterized by using five different interacting protein partners and an intramolecular folding strategy. Cell culture studies and imaging in living mice was performed to validate the new split sites. In addition, the signal generated by the newly identified combination of fragments (Nfluc 398/ Cfluc 394) was compared with different split luciferase fragments currently in use for studying protein-protein interactions and was shown to be markedly superior with a lower self-complementation signal and equal or higher postinteraction absolute signal. This study also identified many different combinations of nonoverlapping and overlapping firefly luciferase fragments that can be used for studying different cellular events such as subcellular localization of proteins, cell-cell fusion, and evaluating cell delivery vehicles, in addition to protein-protein interactions, both in cells and small living animals.