A successful DNA‐encoded library (DEL) will consist of diverse skeletons and cover chemical space as comprehensive as possible to fully realize its potential in drug discovery and chemical biology. However, the lack of versatile on‐DNA arylation methods for phenols that are less nucleophilic and reactive poses a great hurdle for DEL to include diaryl ether, a privileged chemotype in pharmaceuticals and natural products. This work describes the use of “substrate activation” approach to address the arylation of DNA‐conjugated phenols. Diaryliodonium salt, a highly electrophilic and reactive arylation reagent, is employed as Ar+ sources to ensure highly selective on‐DNA arylation of phenols and oximes with both high yields and DNA fidelity. Notably, the new on‐DNA arylation reaction can be applied to the late‐stage modification of peptides containing tyrosine side‐chain and to synthesize DNA‐tagged analogues of existing drug molecules such as sorafenib, a known pan‐kinase inhibitor. The new on‐DNA diaryliodonium salts chemistry affords a greater flexibility in DEL design and synthesis.