Improved chemical library screens for drug modulators of a target protein are vital to advance precision medicine. Here, we describe an ultrasensitive dynamic light scattering (DLS) based biosensor using gold nanoparticles as plasmon-enhanced sensing probes to rapidly screen anticancer compounds. The nanobiosensor which consists of DNA-conjugated dumbbell-shaped gold nanoprobes can detect protein activities in drug-treated cells. We have validated the utility of our nanosensor to screen for compounds known to reactivate mutated tumor suppressor protein p53 for DNA binding in complex cellular context, which leads to significant increases in the hydrodynamic size of the nanoprobes through DLS measurement. This unique nanoplasmonic biosensor not only significantly enhances the DLS signal for specific biomolecular binding, but also effectively suppresses the background noise from irrelevant entities, which greatly improves sensitivity and reduces consumption of both sample and probe. In addition, a competition assay designed to evaluate the relative DNA binding affinities of p53 using the same sensing probes allows a concomitant assessment of responsive p53 pathways downstream or cell fate. Most critically, this nanosensor enables direct interrogation of endogenous protein activities following drug treatment in live cells, allowing simultaneous on-target validation during phenotypic screens. This DLS-based nanobiosensor is broadly applicable to other DNA binding molecules and/or proteins, and holds great potential for high-throughput screening campaigns utilizing both conventional and fragment-based compound libraries in drug discovery.