We have developed a method in which randomized libraries of zinc finger-containing artificial transcription factors are used to induce phenotypic variations in yeast and mammalian cells. By linking multiple zinc-finger domains together, we constructed more than 100,000 zinc-finger proteins with diverse DNA-binding specificities and fused each of them to either a transcription activation or repression domain. The resulting transcriptional regulatory proteins were expressed individually in cells, and the transfected cells were screened for various phenotypic changes, such as drug resistance, thermotolerance or osmotolerance in yeast, and differentiation in mammalian cells. Genes associated with the selected phenotypes were also identified. Our results show that randomized libraries of artificial transcription factors are useful tools for functional genomics and phenotypic engineering.