scFv‐BM3 is a single‐chain variable fragment (scFv) against aflatoxin B1 (AFB1) engineered by affinity maturation and site‐directed mutagenesis, and thus has a 31‐fold higher affinity than its wild‐type. To apply scFv‐BM3 to immunological detection of AFB1, periplasmic expression in Escherichia coli was attempted to produce a functional form of scFv‐BM3. scFv‐BM3 accumulated as inactive aggregates in the cells. However, it was found that scFv‐BM3 secreted into the culture medium had binding activity to AFB1. Expression conditions for scFv‐BM3 were further manipulated to enhance secretion into the culture medium. This extracellular secretion of functional scFv‐BM3 was significantly improved by supplementation with Triton X‐100 and optimization of expression conditions. The scFv‐BM3 purified from the culture medium exhibited a typical antiparallel β‐sheet structure and adopted a proper conformation to bind AFB1 with high affinity and specificity in various biophysical and biochemical analyses. Significance and Impact of the Study Single‐chain variable fragments (scFvs) are recombinant antibodies that are difficult to produce as a functional form in Escherichia coli. This study demonstrates the production of functional scFvs against aflatoxin B1 (AFB1) (scFv‐BM3) using Escherichia coli by extracellular secretion. While periplasmic expression of scFv‐BM3 resulted in formation of inactive aggregates in E. coli, the scFv‐BM3 secreted into the culture medium adopted a properly folded structure for specific binding to AFB1. This study promotes the application of functional scFv‐BM3 to the immunological detection of AFB1 in biotechnology fields.