Cell-surface display of functional proteins is a powerful and useful tool for regulating and reinforcing cellular functions. Direct incorporation of site-specifically lipidated proteins from the extracellular medium is more rapid, easily controllable and reliable in displaying active proteins than expression through gene transfer. However, undesirable amphiphilic reagents such as organic co-solvents and detergents were required for suppressing aggregation of ordinary lipidated proteins in solution. We report here sortase A-catalyzed modification of proteins with a poly(ethylene glycol)(PEG)-lipid in situ on the surface of living cells. Proteins fused with a recognition tag were site-specifically ligated with the PEG-lipid which was preliminary incorporated into cell membranes. Accordingly, target proteins were successfully displayed on living cells without aggregation under an amphiphilic reagent-free condition. Furthermore, to demonstrate the availability of the present method, Fc domains of immunoglobulin G were displayed on cancer cells, and the phagocytosis of cancer cells with dendritic cells were enhanced through the Fc-Fc receptor interaction. Thus, the present facile chemoenzymatic method for protein display can be utilized for modulating cell-cell interactions in cell and tissue engineering fields. Biotechnol. Bioeng. 2013;110: 2785-2789. (c) 2013 Wiley Periodicals, Inc.