Discovery of new catalysts for demanding aqueous reactions is challenging. Here, we describe methodology for selection of catalytic phages by taking advantage of localized assembly of the product of the catalytic reaction that is screened for. A phage display library covering 109 unique dodecapeptide sequences is incubated with nonassembling precursors. Phages which are able to catalyze formation of the self-assembling reaction product (via amide condensation) acquire an aggregate of reaction product, enabling separation by centrifugation. The thus selected phages can be amplified by infection of Escherichia coli. These phages are shown to catalyze amide condensation and hydrolysis. Kinetic analysis shows a minor role for substrate binding. The approach enables discovery and mass-production of biocatalytic phages.