Many antibody fragments, selected ex vivo by phage display, fail to form functional antigen-binding entities when expressed and used intracellularly (i.e., as intrabodies) because the interior of the cell poses significant challenges on the folding of antibodies. Such dropout can be avoided by employing intracellular selection methods like yeast or bacterial two hybrid systems. These involve four facile steps: construction of plasmids, transformation of microbial cells, intracellular expression of fusion proteins, and selection for reporter activity. Using E. coli as host instead of yeast offers the advantages of a faster growth and a higher transformation efficiency allowing to screen larger repertoires. This chapter describes the protocol, optimized to identify antigen-specific single domain antibodies (sdAbs), by bacterial two hybrid selection.