The therapeutic application of small recombinant antibody molecules is often limited by a short serum half-life. In order to improve the pharmacokinetic properties, we have investigated a strategy utilizing fusion with an albumin-binding domain (ABD) from streptococcal protein G. This strategy was applied to a bispecific single-chain diabody (scDb CEACD3) developed for the retargeting of cytotoxic T cells to CEA-expressing tumor cells. This novel tri-functional fusion protein (scDb-ABD) was expressed in mammalian cells and recognized both antigens as well as human and mouse serum albumin. scDb-ABD was capable to retarget T cells to CEA-expressing target cells in vitro and to activate the effector cells as measured by stimulation of IL-2 release. Although activity was reduced 3-fold compared with scDb and further reduced 4-fold in the presences of human serum albumin, this assay demonstrated that scDb-ABD is active when exposed to all three antigens. Compared with scDb, the circulation time of scDb-ABD in mice was prolonged 5- to 6-fold similar to a previously described scDb-HSA fusion protein. This strategy, which adds only a small protein domain (46 amino acids) and which utilizes high-affinity, non-covalent albumin interaction, should be broadly applicable to improve serum half-lives of small recombinant antibody molecules.