Phage display is a powerful technique for identifying specific ligands to a given target. In this work random peptides derived from the biotin accepting domain of the Klebsiella pneumoniae oxaloacetate decarboxylase were displayed on bacteriophage lambda heads to determine the minimal sequence length that is necessary to effect biotinylation in vivo. Phages with a functional biotinylation domain were identified after affinity purification with immobilised avidin. All biotinylated phages isolated this way were found to have a sequence of 66 amino acids from the parental protein in common. This minimal biotinylation domain is fully functional as a biotin acceptor and more resistant to proteolytic attack compared to domains of larger size derived from the same protein. The data present the first example of a posttranslational protein modification analysed in a phage display system. Moreover, a biotin domain of reduced size and improved stability was identified, that should be superior to the larger parental protein as a tag to generate biotinylated fusion proteins.