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The yeast two-hybrid system was used to screen a library of random peptides fused to a transcriptional activation domain in order to identify peptides capable of binding to the retinoblastoma protein (Rb). Seven peptides were identified, all of which contain the Leu-X-Cys-X-Glu motif found in Rb-binding proteins, although their activity in the yeast assay varied over a 40-fold range. Mutagenesis of the DNA encoding two of these peptides followed by screening in the two-hybrid system allowed the delineation of residues apart from the invariant Leu, Cys and Glu that affect binding to Rb. Binding affinities of a peptide and one of its variants to Rb, determined by surface plasmon resonance, correlated with results from the two-hybrid assay. This method offers several advantageous features compared to existing technology for screening peptide libraries: in vivo detection of protein-peptide interactions, high sensitivity, the capacity for rapid genetic screening to identify stronger and weaker binding peptide variants, and the use of a simple assay (transcriptional activity) as a means to assess binding affinity.