We report a general combinatorial approach to identify optimal substrates of a given protease by using quantitative kinetic screening of cellular libraries of peptide substrates (CLiPS). A whole-cell protease activity assay was developed by displaying fluorescent reporter substrates on the surface of Escherichia coli as N-terminal fusions. This approach enabled generation of substrate libraries of arbitrary amino acid composition and length that are self-renewing. Substrate hydrolysis by a target protease was measured quantitatively via changes in whole-cell fluorescence by using FACS. FACS enabled efficient screening to identify optimal substrates for a given protease and characterize their cleavage kinetics. The utility of CLiPS was demonstrated by determining the substrate specificity of two unrelated proteases, caspase-3 and enteropeptidase (or enterokinase). CLiPS unambiguously identified the caspase-3 consensus cleavage sequence DXVDG. Enteropeptidase was unexpectedly promiscuous, but exhibited a preference for substrates with the motif (D/E)RM, which were cleaved substantially faster than the canonical DDDDK recognition sequence, widely used for protein purification. CLiPS provides a straightforward and versatile approach to determine protease specificity and discover optimal substrates on the basis of cleavage kinetics.