The center of DNA three-way junctions, constituting a yoctoliter (10(-24) L) volume, is applied as an efficient reactor to create DNA-encoded libraries of chemical products. Amino acids and short peptides are linked to oligonucleotides via cleavable and noncleavable linkers. The oligonucleotide sequences contain two universal assembling domains at the center and a distal codon sequence specific for the attached building block. Stepwise self-assembly and chemical reactions of these conjugates in a combinatorial fashion create a library of pentapeptides in DNA three-way junctions in a single reaction vessel. We demonstrate the formation of an evenly distributed library of 100 peptides. Each library member contains a short synthetic peptide attached to a unique genetic code creating the necessary "genotype-phenotype" linkage essential to the process of in vitro molecular evolution. Selective enrichment of the [Leu]-enkephalin peptide from an original frequency of 1 in 10 million in a model library to a final frequency of 1.7% in only two rounds of affinity selection is described and demonstrates successful molecular evolution for a non-natural system.