Cells that constitutively diversify their immunoglobulin genes can be used for selection of novel antibodies and for refining existing affinities and specificities. Here, we report an adaptation of the chicken DT40 system wherein its capacity for somatic hypermutation is harnessed to evolve human antibodies expressed as single-chain variable fragments (scFvs). Expression of membrane-anchored scFvs from within the rearranged Igλ locus created self-diversifying scFv libraries from which we could both select scFvs of a desired specificity and evolve both the specificity and affinity of existing scFvs by iterative expansion and selection. From these scFvs, we were able to create fully human IgG antibodies with nanomolar affinities. We further enhanced the functionality of the system by creating a pool of DT40 scFv lines with high levels of mutation driven by the overexpression of a hyperactive variant of activation-induced deaminase. From this library, we successfully isolated scFvs that bound the spliceosome factor CWC15 and the cytokine human IFNγ. Our results demonstrate the flexibility and utility of DT40 for rapid generation of scFv repertoires and efficient selection, evolution and affinity maturation of scFv specificities.