Yeast surface display (YSD) is a powerful tool in biotechnology that links genotype to phenotype. In this review, the latest advancements in protein engineering and high‐throughput screening based on YSD are covered. The focus is on innovative methods for overcoming challenges in YSD in the context of biotherapeutic drug discovery and diagnostics. Topics ranging from titrating avidity in YSD using transcriptional control to the development of serological diagnostic assays relying on serum biopanning and mitigation of unspecific binding are covered. Screening techniques against nontraditional cellular antigens, such as cell lysates, membrane proteins, and extracellular matrices are summarized and techniques are further delved into for expansion of the chemical repertoire, considering protein–small molecule hybrids and noncanonical amino acid incorporation. Additionally, in vivo gene diversification and continuous evolution in yeast is discussed. Collectively, these techniques enhance the diversity and functionality of engineered proteins isolated via YSD, broadening the scope of applications that can be addressed. The review concludes with future perspectives and potential impact of these advancements on protein engineering. The goal is to provide a focused summary of recent progress in the field.