Engineering enzyme activity has been challenging because of uncertainties in structure-function relationships and difficulties in screening a large number of mutant enzymes. A product capture strategy using phage display is presented here for the selection of improved enzymes from a large library of variants (>10(9) independently derived mutants). Subtiligase, a double mutant of subtilisin BPN' that catalyzes the ligation of peptides, was displayed on phage. Twenty-five active site residues were randomly mutated in groups of four or five to yield six different libraries that were independently sorted. Variants that ligated a biotin peptide onto their own extended N termini were selectively captured. Mutant subtiligases were identified that had increased ligase activity. The selection also yielded unexpected subtiligase mutants having residues known to improve the stability and oxidative resistance of wild-type subtilisin. These studies are exemplary for the use of phage to improve enzyme function when it is closely linked to a selectable catalytic event.