This study was focused on developing catalytically active β-lactamase enzyme molecules that have target-recognizing sites built within their scaffold. Using phage-display approach, nine libraries were constructed by inserting the randomized linear or cysteine-constrained heptapeptides in the five different loops on the outer surface of P99 β-lactamase molecule. The pIII signal peptide of Secpathway was employed for a periplasmic translocation of the β-lactamase fusion protein, which we found more efficient than the DsbA signal peptide of SRP-pathway. The randomized heptapeptide loops replaced native amino acids between positions 34 Y-37 K, 238 M-246 A, 275 N-280 A, 305 A-311 S, or 329 I-334 I of the P99 β-lactamase molecules for generating the loop-1 to -5 libraries, respectively. The diversity of each loop library was judged by counting the primary and β-lactamase-active clones. The linear peptide inserts in the loop-2 library showed the maximum number of the β-lactamaseactive clones, followed by the loop-5, loop-3, and loop-4. The insertion of the cysteine-constrained loops exhibited a dramatic loss of the enzyme-active β-lactamase clones. The complexity of the loop-2 linear library, as determined by the frequency and diversity of amino acid distributions in the randomized region, appears consistent with the standards of other types of phage display library systems. The selection of the loop-2 linear library on streptavidin protein as a test target identified several β-lactamase clones that specifically bound to streptavidin. In conclusion, this study identified the suitability of the loop-2 of P99 β-lactamase for constructing a phage-display library of the β-lactamase enzyme-active molecules that can be selected against a target. This is an enabling step in our long-term goal of developing bifunctional β-lactamase molecules against cancer-specific targets for enzyme prodrug therapy of cancer.