We present the design, characterization, and testing of a laboratory prototype radiological search and localization system. The system, based on time-encoded imaging, uses the attenuation signature of neutrons in time, induced by the geometrical layout and motion of the system. We have demonstrated the ability to detect a ~1 mCi Cf-252 radiological source at 100 m standoff with 90% detection efficiency and 10% false positives against background in 12 min. This same detection efficiency is met at 15 s for a 40 m standoff, and 1.2 s for a 20 m standoff.