Site-specific protein labeling with Escherichia coli biotin ligase (BirA) has been used to introduce fluorophores, quantum dots (QDs), and photocross-linkers onto recombinant proteins fused to a 15-amino acid acceptor peptide (AP) substrate for BirA and expressed on the surface of living mammalian cells. Here, we used phage display to engineer a new and orthogonal biotin ligase-AP pair for site-specific protein labeling. Yeast biotin ligase (yBL) does not recognize the AP, but we discovered a new 15-amino acid substrate for yBL called the yeast acceptor peptide (yAP), using two generations of phage display selection from 15-mer peptide libraries. The yAP is not recognized by BirA, and thus, we were able to specifically label AP and yAP fusion proteins coexpressed in the same cell with differently colored QDs. We fused the yAP to a variety of recombinant proteins and demonstrated biotinylation by yBL at the N-terminus, C-terminus, and within a flexible internal region. yBL is extremely sequence-specific, as endogenous proteins on the surface of yeast and HeLa cells are not biotinylated. This new methodology expands the scope of biotin ligase labeling to two-color imaging and yeast-based applications.