Using a "split-synthesis" solid phase synthetic approach, bead libraries can be generated such that each bead displays only one chemical entity. This "one-bead one-compound" combinatorial library can then be assayed for specific biological properties using either a solid-phase on-bead binding or functional assay, or a releasable solution phase assay. Positive compound-beads can then be isolated for structure determination. Various assay systems to screen such a "one-bead one-compound" library are described. We have used this combinatorial library method to discover peptides that bind to the cell surface immunoglobulins of murine lymphoma cells. Such peptides, when presented in an oligomeric form to a lymphoma cell are able to induce signal transduction. Additionally, we have also applied the "one-bead one-compound" combinatory library approach to elucidate peptide substrate motifs for protein tyrosine kinases. Multiple distinct peptide motifs were identified for p60(c-src) protein tyrosine kinase. Using the identified peptide substrates as templates, potent and highly specific pseudosubstrate-based peptide inhibitors were developed.