in this study, we present a straightforward approach for functional cell-based screening by coencapsulation of secretor yeast cells and reporter mammalian cells in millions of individual agarosecontaining microdroplets. our system is compatible with ultra-high-throughput selection utilizing standard fluorescence-activated cell sorters (FACS) without need of extensive adaptation and optimization. In a model study we co-encapsulated murine interleukin 3 (mIL-3)-secreting S. cerevisiae cells with murine Ba/F3 reporter cells, which express green fluorescent protein (GFP) upon stimulation with mIL-3, and could observe specific and robust induction of fluorescence signal compared to a control with yeast cells secreting a non-functional mIL-3 mutant. We demonstrate the successful enrichment of activating mIL-3 wt-secreting yeast cells from a 1:10,000 dilution in cells expressing the inactive cytokine variant by two consecutive cycles of co-encapsulation and fAcS. this indicates the suitability of the presented strategy for functional screening of high-diversity yeast-based libraries and demonstrates its potential for the efficient isolation of clones secreting bioactive recombinant proteins. The importance of biopharmaceuticals (biologics) in medicine is increasing at a fast pace and the biologics market is predicted to reach nearly 400 billion USD/year by 2025 1. Frequently applied biologics comprise substances such as cytokines, monoclonal antibodies, hormones, soluble receptors, recombinant DNAs, enzymes, and synthetic vaccines. While biologics in targeted therapies often demonstrate remarkable safety and specificity, especially in case of autoimmune diseases 2 and cancer 3 , the discovery of novel molecules and the necessary functional validation still represent a bottleneck in the development of novel biopharmaceuticals. To overcome these shortcomings, powerful display technologies such as phage display 4 and yeast surface display 5 have been developed which allow for the isolation of specific high-affinity molecules and respective genes from complex variant libraries. However, identified binders frequently show poor physiological activity in a biological context. Thus, extensive secondary functional screens are necessary for identification of hit molecules with the desired functional activity. Furthermore, those screens require elaborate subcloning of the surface-displayed hits into soluble expression formats and outcoming clones frequently demand further optimization of physicochemical and pharmacokinetic properties 6. Consequently, implementing functional assays and phenotypic screens in an earlier selection phase appears highly beneficial for the discovery of new potent biologic drugs or even first-in-class medicines with novel molecular mechanisms of action 7. In this context, a major limitation is represented by the relatively low throughput of classical phenotypic screens, falling far behind the performance of high-diversity library-based approaches resting on affinity-driven selection protocols 8. Complex p...