IVC (in vitro compartmentalization) provides a complete cell-free approach for the production of novel targeted proteins. IVC uses aqueous droplets, which contain DNA and components for protein production, within water-in-oil emulsions. Recent advances in the composition and formation, as well as the detection, sorting and recovery, of the droplets enable the evolution of the encoded protein. Furthermore, IVC technology permits the step-wise addition of reagents into the droplets, making them suitable for high-throughput applications - where synthetic enzymes with substrate specificity are selected for catalytic activity, binding and regulation. In the broad field of in vitro display, developments such as the incorporation of unnatural amino acids and the production of cell toxic proteins expand the diverse spectrum of future applications for IVC.