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We describe a technology for attaching libraries of synthetic compounds to coat proteins of bacteriophage particles such that the identity of the chemical structure is encoded in the genome of the phage, analogous to peptides displayed on phage surfaces by conventional phage-display techniques. This format allows a library of synthetic compounds to be screened very efficiently as a single pool. Encoded phage serve as extremely robust reporters of the presence of each compound, providing exquisite sensitivity for identification of active compounds engaged in complex biological processes such as receptor-mediated endocytosis and transcytosis. To evaluate this approach, we constructed a library of 980 analogs of folic acid displayed on T7 phage, and demonstrated rapid identification of compounds that bind to folate receptor and direct endocytosis of associated phage particles into cells that express the targeted receptor.