The insertion of peptide loops into the polypeptide chain of proteins at surface-exposed regions is an attractive avenue to modify the protein's properties or to evolve new functionalities. The strategy of peptide loop insertion has, for example, been used to create new binding sites in protein scaffolds and has led to the isolation of proteins with excellent binding affinities for various biological structures. Peptide loops have also been inserted into enzymes to modulate their catalytic properties. We recently used loop insertion mutagenesis to evolve a mutant of O(6)-alkylguanine-DNA-alkyltransferase (AGT) that reacts with the nonnatural substrate O(6)-propargylguanine for applications in molecular imaging. In this chapter, we describe in detail the protocols that we have applied (1) to identify sites in AGT that are permissive to loop insertion, (2) to manipulate DNA to create large loop insertion libraries, and (3) to identify mutants with desired properties. The experimental procedures are general and can easily be adapted for the insertion of peptide loops into other classes of enzymes or into any protein of interest.