The TEM-1 beta-lactamase protein fragment complementation assay was investigated for its applicability in affinity protein-based interaction studies in Escherichia coli, using an affibody-based model system. Results from co-transformation experiments showed that an ampicillin resistant phenotype was specifically associated with cognate affibody-target pairings. Attempts to monitor beta-lactamase complementation in vitro with the fluorescent beta-lactamase substrates CCF2/AM and CCF2 showed that E. coli lacks an esterase activity necessary for activation of the esterified and membrane-permeable CCF2/AM form of the substrate. Interestingly, supplementation of the assay reaction with a purified fungal lipase (cutinase) resulted in efficient activation of CCF2/AM in vitro. Further, periplasmic expression of cutinase allowed for fluorescent discrimination between beta-lactamase positive and negative living E. coli cells using the CCF2/AM substrate, which should open the way for novel applications for this prokaryotic host in protein interaction studies.