A number of computational approaches have been developed to reengineer promising chimeric proteins one at a time through targeted point mutations. In this article, we introduce the computational procedure IPRO (iterative protein redesign and optimization procedure) for the redesign of an entire combinatorial protein library in one step using energy-based scoring functions. IPRO relies on identifying mutations in the parental sequences, which when propagated downstream in the combinatorial library, improve the average quality of the library (e.g., stability, binding affinity, specific activity, etc.). Residue and rotamer design choices are driven by a globally convergent mixed-integer linear programming formulation. Unlike many of the available computational approaches, the procedure allows for backbone movement as well as redocking of the associated ligands after a prespecified number of design iterations. IPRO can also be used, as a limiting case, for the redesign of a single or handful of individual sequences. The application of IPRO is highlighted through the redesign of a 16-member library of Escherichia coli/Bacillus subtilis dihydrofolate reductase hybrids, both individually and through upstream parental sequence redesign, for improving the average binding energy. Computational results demonstrate that it is indeed feasible to improve the overall library quality as exemplified by binding energy scores through targeted mutations in the parental sequences.