Protein scaffolds derived from non-immunoglobulin sources are increasingly being adapted and engineered to provide unique binding molecules with a diverse range of targeting specificities. The ColE7 immunity protein (Im7) from Escherichia coli is potentially one such molecule, as it combines the advantages of (i) small size, (ii) stability conferred by a conserved four anti-parallel alpha-helical framework and (iii) availability of variable surface loops evolved to inactivate members of the DNase family of bacterial toxins, forming one of the tightest known protein-protein interactions. Here we describe initial cloning and protein expression of Im7 and its cognate partner the 15 kDa DNase domain of the colicin E7. Both proteins were produced efficiently in E.coli, and their in vitro binding interactions were validated using ELISA and biosensor. In order to assess the capacity of the Im7 protein to accommodate extensive loop region modifications, we performed extensive molecular modelling and constructed a series of loop graft variants, based on transfer of the extended CDR3 loop from the IgG1b12 antibody, which targets the gp120 antigen from HIV-1. Loop grafting in various configurations resulted in chimeric proteins exhibiting retention of the underlying framework conformation, as measured using far-UV circular dichroism spectroscopy. Importantly, there was low but measurable transfer of antigen-specific affinity. Finally, to validate Im7 as a selectable scaffold for the generation of molecular libraries, we displayed Im7 as a gene 3 fusion protein on the surface of fd bacteriophages, the most common library display format. The fusion was successfully detected using an anti-Im7 rabbit polyclonal antibody, and the recombinant phage specifically recognized the immobilized DNase. Thus, Im7 scaffold is an ideal protein display scaffold for the future generation and for the selection of libraries of novel binding proteins.