Fibroblast activation protein (FAP) is a serine protease selectively expressed on tumor stromal fibroblasts in epithelial carcinomas and is important in cancer growth, adhesion, and metastases. As FAP enzymatic activity is a potent therapeutic target, we aimed to identify inhibitory antibodies. Using a competitive inhibition strategy, we used phage display techniques to identify 53 single-chain variable fragments (scFvs) after three rounds of panning against FAP. These scFvs were expressed and characterized for binding to FAP by surface plasmon resonance and flow cytometry. Functional assessment of these antibodies yielded an inhibitory scFv antibody, named E3, which could attenuate 35% of FAP cleavage of the fluorescent substrate Ala-Pro-7-amido-4-trifluoromethylcoumarin compared with nonfunctional scFv control. Furthermore, a mutant E3 scFv was identified by yeast affinity maturation. It had higher affinity (4-fold) and enhanced inhibitory effect on FAP enzyme activity (3-fold) than E3. The application of both inhibitory anti-FAP scFvs significantly affected the formation of 3-dimensional FAP-positive cell matrix, as demonstrated by reducing the fibronectin fiber orientation from 41.18% (negative antibody control) to 34.06% (E3) and 36.15% (mutant E3), respectively. Thus, we have identified and affinity-maturated the first scFv antibody capable of inhibiting FAP function. This scFv antibody has the potential to disrupt the role of FAP in tumor invasion and metastasis.