Preparation of support-bound combinatorial peptide libraries with free C-termini has been challenging in the past because solid-phase peptide synthesis usually starts from the C-terminus, which must be covalently attached to the solid support. In this work, we have developed a general methodology to synthesize and screen one-bead-one-compound peptide libraries containing free C-termini. TentaGel microbeads (90 mum) were spatially segregated into outer and inner layers, and peptides were synthesized on the beads in the conventional C --> N manner, with their C-termini attached to the support through an ester linkage on the bead surface but through an amide bond in the bead interior. The surface peptides were cyclized between their N-terminal amine and a carboxyl group installed at a C-terminal linker sequence, while the internal peptides were kept in the linear form. Base hydrolysis of the ester linkage in the cyclic peptides regenerated linear peptides that contained a free alpha-carboxyl group at their C-termini but remained covalently attached to the resin via the N-termini ("inverted" peptides). An inverted peptide library containing five random residues (theoretical diversity of 3.2 x 10 (6)) was synthesized and screened for binding to four postsynaptic density-95/discs large/zona occluden-1 (PDZ) domains of sodium-hydrogen exchanger regulatory factor-1 (NHERF1) and channel-interacting PDZ domain protein (CIPP). The identity of the binding peptides was determined by sequencing the linear encoding peptides inside the bead by partial Edman degradation/mass spectrometry. Consensus recognition motifs were identified for the PDZ domains, and representative peptides were resynthesized and confirmed for binding to their cognate PDZ domains. This method should be generally applicable to all PDZ domains as well as other protein domains and enzymes that recognize the C-terminus of their target proteins.