Journal of Nucleic Acids of proteins, where water-in-oil (W/O) emulsions were used as microcompartments. We then introduce the IVC using cell-sized lipid vesicles, liposomes. Firstly, the technology underlying protein synthesis using an IVTT inside liposome is described. Then, construction of the liposome-based gene screening system using FACS and examples of the application of the liposome-based IVC to directed evolution of proteins are described. Finally, we remark on the future directions for liposome-based IVC in directed evolution that are impossible with other IVC techniques. 2. In Vitro Compartmentalization (IVC) 2.1. Emulsion-Based IVC. In vitro compartmentalization (IVC) is a technique for linking genotype to phenotype. Unlike other techniques used in conventional in vitro display, IVC does not connect directly the gene and encoded protein. IVC utilizes microcompartments for genotype-phenotype linkage. A single DNA and an IVTT are encapsulated in a microcompartment (Figure 2, left). Proteins encoded by the gene accumulate inside the microcompartment through in vitro protein synthesis. Colocalization of the gene and pro- tein links the genotype and phenotype. W/O emulsion was ﬁrst utilized for microcompartments in IVC-based genetic screening. With this technique, genes encoding the DNA methyltransferase M. HaeIII were enriched from a mixture containing 107-fold excess genes encoding dihydrofolate reductase [12]. Furthermore, toward high-throughput gene screening using an FACS, microbead display using IVC (Figure 2, right) was performed to screen catalytic activity of enzymes with a soluble non-DNA substrate [13]. This tech- nique enables us to evaluate the catalytic activity of enzyme encapsulated in cell-size microcompartments under a variety of conditions that can inhibit the in vitro protein synthesis, because the evaluation of catalytic activity is separated from the protein synthesis. As a next advancement of IVC, water- in-oil-in-water emulsion (double emulsion) was adapted and enabled direct sorting of intact emulsion droplets. This double emulsion technique was ﬁrst demonstrated through model selection of emulsion droplets encapsulating FolA genes from a droplet mixture with two separate W/O emulsions: a positive emulsion containing FolA genes and a ﬂuorescent marker as well as a negative emulsion containing M. HaeIII genes and no ﬂuorescent marker [14]. Reemulsiﬁcation of W/O emulsion droplets in the aqueous phase creates double emulsion droplets, which can be directly analyzed and sorted using an FACS. Using the emulsion- based IVC and in vitro protein synthesis, Ebg, which is an E. coli protein of unknown function, was evolved into mutant proteins with β-galactosidase catalytic activity [15]. Single genes from the mutation library for Ebg as well as an IVTT and a ﬂuorogenic substrate were compartmentalized in a W/O emulsion droplet. In an emulsion droplet, Ebg variants are translated from the mutant gene and yield ﬂuorescent product if the variants express β-galactosidase catalytic activity. After reemulsiﬁcation of the W/O emulsion in the aqueous phase, double emulsion droplets were screened directly for β-galactosidase activity (through the ﬂuorescent signal from turnover reaction products). 3 2.2. Advantages and Limitations of Emulsion-Based IVC. Emulsion-based IVC is suitable for the quantitative screening of enzyme variants using an FACS because each emulsion droplet yields a ﬂuorescent signal, which reﬂects the enzy- matic activity of each variant. Other in vitro display tech- niques involve screening based on a binding event between a displayed protein and immobilized ligand and are not adapted for observing a catalytic turnover event. Although emulsion-based IVC has been useful and successful for directed evolution of enzymes, this method has two technical limitations. The ﬁrst limitation concerns the stringency of the genotype-phenotype link (Figure 3, right). Double emulsion droplets containing multiple compartments are formed when W/O emulsion is reemulsiﬁed in an aqueous phase. During the reemulsiﬁcation process, two types of microcompartments can be entrapped in a double emulsion droplet; one microcompartment can encapsulate the gene of interest and the other can encapsulate an unrelated gene. The genotype-phenotype link would be severed if two diﬀerent mutant genes were in a double emulsion droplet for sorting using an FACS [16]. One approach to overcome the issues from multiple compartments is through a high-throughput screening platform using droplet-based microﬂuidics [16]. This screening platform comprises a droplet generation device (droplets for gene ampliﬁcation), droplet fusion device (electrocoalescence between droplet pairs of a gene- containing droplet and an IVTT-containing droplet for the genotype-phenotype link), and sorting device (for recovery of the genes of interest). The second limitation of the emulsion-based IVC is a technical hurdle for its application using a variety of protein classes, such as membrane proteins (Figure 3, left), which cannot be overcome by the use of the aforementioned droplet-based microﬂuidics. For the technical issue of single droplet containing substructures, and that preclude membrane protein use in directed evolution of proteins (Figure 3), cell-sized micro- compartments with a phospholipid bilayer membrane are ideal solution for both issues [17–19]. We have been studying in vitro protein synthesis in liposomes [20–23] and constructed a high-throughput gene screening system using liposomes (liposome-based IVC) and an FACS [24, 25]. Our experimental system for protein synthesis in liposomes com- prises a liposome as the bioreactor, chemical components for protein synthesis, and analytical tools for quantitation of the proteins produced. The following sections survey the liposomes used in preparation methods for cell-sized compartments (Section 3), in vitro protein synthesis using a PURE system (Section 4), high-throughput analysis using an FACS (Section 5), and liposome-based IVC for directed evolution of proteins (Section 6). 3. Liposomes as Cell-Sized Microcompartments 3.1. Liposomes. A phospholipid vesicle is a spherical hollow capsule that has an inner aqueous phase surrounded by a phospholipid bilayer membrane. The vesicular structure is formed spontaneously by dispersing phospholipids in an aqueous medium (Figure 4). Vesicle formation from egg lecithin was ﬁrst reported by Bangham and Horne in