Objective To generate the phage display nanobody library immunized by lymphocyte-activation gene 3 (LAG-3) and to validate the functional activity of obtained anti-LAG-3 nanobodies. Methods The peripheral blood cDNA library was isolated from the adult llama which was immunized by human LAG-3 protein. The nanobodies sequences were obtained by nested PCR and cloned into the phagemid vector pComb3XSS, then transformed into Escherichia coli XL1-Blue cells for library generation and quality analysis. Anti-LAG-3 specific nanobodies were screened by phage display and sequenced by next-generation sequencing. Nanobodies were cloned into pET-22b (+) vector and Escherichia coli BL21 (DE3) cells were used for protein expression. The proteins were purified by using the Prism A column, then HPLC-MS, ELISA, Western blot, and surface plasmon resonance technology (SPR) were performed to characterize the nanobodies. Results The library capacity of the nanobody phage immune library with great diversity was 7.20×108 CFU/mL. After four rounds of biopanning, three individual nanobodies with distinct amino acid sequences VHH-L1-3, VHH-L3-2 and VHH-L13-2 were picked. The purity of the purified nanobodies was more than 95%. All of these three nanobodies exhibited high binding affinities with recombinant human LAG-3 specifically, among which the KD value of VHH-L13-2 was 3.971×10-9 mol/L. VHH-L13-2 exhibited the inhibitory effects on the association of LAG-3 and its ligand FGL-1, and the half maximal inhibitory concentration (IC50) value was 15.58 nmol/L. Conclusion The anti-LAG-3 phage display nanobody library is generated successfully. The anti-LAG-3 nanobodies possess high specificity and binding affinity and exhibit the inhibitory effects on the association of LAG-3 and its ligand.