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Camelids produce functional antibodies devoid of light chains. Autonomous heavy chain variable (VHH) domains in these molecules have adapted to the absence of the light chain in the following ways: bulky hydrophobic residues replace small aliphatic residues in the former light chain interface, and residues from the third complementarity-determining region (CDR3) pack against the framework and stabilize the global VHH domain fold. To determine the specific roles of CDR3 residues in framework stabilization, we used naı¨ve phage-displayed libraries, combinatorial alanine-scanning mutagenesis and biophysical characterization of purified proteins. Our results indicate that in the most stable scaffolds, the structural residues in CDR3 reside near the boundaries of the loop and pack against the framework to form a small hydrophobic core. These results allow us to differentiate between structural CDR3 residues that should remain fixed, and CDR3 residues that are tolerant to substitution and can therefore be varied to generate functional diversity within phage-displayed libraries. These methods and insights can be applied to the rapid design of heavy chain scaffolds for the identification of novel ligands using synthetic, antibody-phage libraries. In addition, they shed light on the relationships between CDR3 sequence diversity and the structural stability of the VHH domain fold. [Copyright &y& Elsevier]