Polypeptide libraries cast a broad net for defining enzyme and binding protein specificities. In addition to uncovering rules for molecular recognition, the binding preferences and functional group tolerances from such libraries can reveal mechanisms underlying biochemical and cellular processes. Ligands obtained from protein libraries can also provide pharmaceutical lead compounds and even reagents to further explore cell biology. Here, we review selected recent examples of protein libraries demonstrating these principles. In particular, we focus on combinatorial libraries composed of randomized peptides or variations of a single protein. The characteristics of various techniques for library constructions and screening are also briefly surveyed.