A recombinant phage antibody system has been used to display functionally active chicken cystatin, a small protein-type inhibitor of papain-like cysteine proteinases. A synthetic gene, AEF-[S1M, M29I, M89L] chicken cystatin, was ligated into phagemid pCANTAB 5E, cloned, sequenced and displayed on the tips of filamentous phage as a fusion protein with protein III (gpIII). The gene was expressed also as soluble inhibitor in a non-suppressor E.coli strain. Recombinant phages were selected by binding to carboxymethylated-papain. The positive phages showed binding to papain in dose dependent manner. The chicken cystatin-gpIII fusion protein was detected with anti-chicken cystatin antibody and with anti-protein III antibody by western blot analysis. Unfused soluble inhibitor was identified in the periplasma and showed strong papain inhibitory activity. The results demonstrate that functionally active cystatin can be displayed on the phage surface. This technology can be employed further to select inhibitor variants which differ in their binding affinity to papain and papain-like enzymes.