Phage display can be used as a protein engineering tool to select proteins with desirable binding properties from a library of randomly constructed mutants. Here, we describe the development of this method for the directed evolution of Bacillus subtilis lipase A, an enzyme that has marked properties for the preparation of pharmaceutically relevant chiral compounds. The lipase gene was cloned upstream of the phage g3p encoding sequence and downstream of a modified g3p signal sequence. Consequently, the enzyme was displayed at the surface of bacteriophage fd as a fusion to its minor coat protein g3p. The phage-bound lipase was correctly folded and fully enzymatically active as determined from the hydrolysis of p-nitrophenylcaprylate with K m-values of 0.38 and 0.33 mM for the phage displayed and soluble lipase, respectively. Both soluble lipase and lipase expressed on bacteriophages reacted covalently with a phosphonate suicide inhibitor. The phage does not hamper lipase binding, since both soluble and phage-bound lipase have a similar half-life of inactivation of approximately 5 min. Therefore, we conclude that the Bacillus lipase can be functionally expressed on bacteriophages as a fusion to the phage coat protein g3p. The specific interaction with the suicide inhibitor offers a fast and reproducible method for the future selection of mutant enzymes with an enantioselectivity towards new substrates.