This Small Business Innovation Research (SBIR) Phase I project aims to develop a novel screen for drug discovery using gel microdrop (GMD) encapsulation technology, phage display technology and fluorescence activated cell sorting. In the last decade, phage display has evolved into a powerful tool for identifying "leads" for drug discovery. High affinity binders with sub-nanomolar dissociation constant have the greatest potential therapeutic value, however, they are difficult to isolate by biopanning. Currently, biopanning is effective at screening ~10 8 libraries in which the phage of interest is present at ~10 4 copies. Screening of highly diverse libraries (>10 9 ) in which phage of interest are typically present at 10-100 copies is difficult using such a method. Improvements have been made to increase the sensitivity of biopanning, but these improvements are limited to certain phage. Using a ~10 8 human growth hormone random library as a model library, Phase I research will develop a novel approach for screening phage libraries.<br/><br/>The commercial application of this project will be in the area of drug discovery. The proposed technology will provide a controlled means of producing peptide and protein libraries that can be used to manufacture and refine molecules for use as therapeutics, and diagnostic and imaging reagents for diseases.