We demonstrate the utility of a microfluidic platform in which water-in-oil droplet compartments serve to miniaturize cell lysate assays by a million-fold for directed enzyme evolution. Screening hydrolytic activities of a promiscuous sulfatase demonstrates that this extreme miniaturization to the single-cell level does not come at a high price in signal quality. Moreover, the quantitative readout delivers a level of precision previously limited to screening methodologies with restricted throughput. The sorting of 3 × 10⁷ monodisperse droplets per round of evolution leads to the enrichment of clones with improvements in activity (6-fold) and expression (6-fold). The detection of subtle differences in a larger number of screened clones provides the combination of high sensitivity and high-throughput needed to rescue a stalled directed evolution experiment and make it viable.