Here we describe YESS 2.0, a highly versatile version of the yeast endoplasmic sequestration screening (YESS) system suitable for engineering and characterizing protein/peptide modifying enzymes such as proteases with desired new activities. By incorporating features that modulate gene transcription as well as substrate and enzyme spatial sequestration, YESS 2.0 achieves a significantly higher operational and dynamic range compared with the original YESS. To showcase the new advantages of YESS 2.0, we improved an already efficient TEV protease variant (TEV-EAV) to obtain a variant (eTEV) with a 2.25-fold higher catalytic efficiency, derived almost entirely from an increase in turnover rate (k cat). In our analysis, eTEV specifically digests a fusion protein in 2 h at a low 1:200 enzyme to substrate ratio. Structural modeling indicates that the increase in catalytic efficiency of eTEV is likely due to an enhanced interaction between the catalytic Cys151 with the P1 substrate residue (Gln). Furthermore, the modeling showed that the ENLYFQS peptide substrate is buried to a larger extent in the active site of eTEV compared with WT TEV. The new eTEV variant is functionally the fastest TEV variant reported to date and could potentially improve efficiency in any TEV application.