Understanding substrate specificity and identification of natural targets of transglutaminase 2 (TG2), the ubiquitous multifunctional cross-linking enzyme, which forms isopeptide bonds between protein-linked glutamine and lysine residues, is crucial in the elucidation of its physiological role. As a novel means of specificity analysis, we adapted the phage display technique to select glutamine-donor substrates from a random heptapeptide library via binding to recombinant TG2 and elution with a synthetic amine-donor substrate. Twenty-six Gln-containing sequences from the second and third biopanning rounds were susceptible for TG2-mediated incorporation of 5-(biotinamido)penthylamine, and the peptides GQQQTPY, GLQQASV, and WQTPMNS were modified most efficiently. A consensus around glutamines was established as pQX(P,T,S)l, which is consistent with identified substrates listed in the TRANSDAB database. Database searches showed that several proteins contain peptides similar to the phage-selected sequences, and the N-terminal glutamine-rich domain of SWI1/SNF1-related chromatin remodeling proteins was chosen for detailed analysis. MALDI/TOF and tandem mass spectrometry-based studies of a representative part of the domain, SGYGQQGQTPYYNQQSPHPQQQQPPYS (SnQ1), revealed that Q(6), Q(8), and Q(22) are modified by TG2. Kinetic parameters of SnQ1 transamidation (K(M)(app) = 250 microM, k(cat) = 18.3 sec(-1), and k(cat)/K(M)(app) = 73,200) classify it as an efficient TG2 substrate. Circular dichroism spectra indicated that SnQ1 has a random coil conformation, supporting its accessibility in the full-length parental protein. Added together, here we report a novel use of the phage display technology with great potential in transglutaminase research.