Directed evolution of enzymes toward improved catalytic performance has become a powerful tool in protein engineering. To be effective, a directed evolution campaign requires the use of high-throughput screening. In this study we describe the development of an ultra high-throughput lysis-free procedure to screen for improved sulfatase activity by combining microdroplet-based single-variant activity sorting with E. coli autodisplay. For the first step in a 4-step screening procedure, we quantitatively screened >105 variants of the homodimeric arylsulfatase from Silicibacter pomeroyi (SpAS1), displayed on the E. coli cell surface, for improved sulfatase activity using fluorescence activated droplet sorting. Compartmentalization of the fluorescent reaction product with living E. coli cells autodisplaying the sulfatase variants ensured the continuous linkage of genotype and phenotype during droplet sorting and allowed for direct recovery by simple regrowth of the sorted cells. The use of autodisplay on living cells simplified and reduced the degree of liquid handling during all steps in the screening procedure to the single event of simply mixing substrate and cells. The percentage of apparent improved variants was enriched >10-fold as a result of droplet sorting. We ultimately identified 25 SpAS1 variants with improved performance toward 4-nitrophenyl sulfate (up to 6.2-fold) and/or fluorescein disulfate (up to 30-fold). In SpAS1 variants with improved performance toward the bulky fluorescein disulfate, many of the beneficial mutations occur in residues that form hydrogen bonds between α-helices in the C-terminal oligomerization region, suggesting a previously unknown role for the dimer interface in shaping the substrate binding site of SpAS1.