PDZ domains mediate protein-protein interactions at specialized subcellular sites, such as epithelial cell tight junctions and neuronal post-synaptic densities. Because most PDZ domains bind extreme carboxyl-terminal sequences, the phage display method has not been amenable to the study of PDZ domain binding specificities. For the first time, we demonstrate the functional display of a peptide library fused to the carboxyl terminus of the M13 major coat protein. We used this library to analyze carboxyl-terminal peptide recognition by two PDZ domains. For each PDZ domain, the library provided specific ligands with sub-micromolar binding affinities. Synthetic peptides and homology modeling were used to dissect and rationalize the binding interactions. Our results establish carboxyl-terminal phage display as a powerful new method for mapping PDZ domain binding specificity.