The lack of efficient identification and isolation methods for specific molecular binders has fundamentally limited drug discovery. Here, we have developed a method to select peptide nucleic acid (PNA) encoded molecules with specific functional properties from combinatorially generated libraries. This method consists of three essential stages: (1) creation of a Lab-on-Bead library, a one-bead, one-sequence library that, in turn, displays a library of candidate molecules, (2) fluorescence microscopy-aided identification of single target-bound beads and the extraction--wet or dry--of these beads and their attached candidate molecules by a micropipette manipulator, and (3) identification of the target-binding candidate molecules via amplification and sequencing. This novel integration of techniques harnesses the sensitivity of DNA detection methods and the multiplexed and miniaturized nature of molecule screening to efficiently select and identify target-binding molecules from large nucleic acid encoded chemical libraries. Beyond its potential to accelerate assays currently used for the discovery of new drug candidates, its simple bead-based design allows for easy screening over a variety of prepared surfaces that can extend this technique's application to the discovery of diagnostic reagents and disease markers.