The present invention relates to the fields of microbiology, molecular biology and protein biochemistry. More particularly, it relates to compositions and methods for analyzing and altering (e.g., enhancing or inhibiting) protein folding and solubility (e.g., within periplasm). The present invention provides an engineered assay for protein folding and solubility in the E. coli periplasm based on co-translational translocation of a chimera comprising a protein of interest fused to TEM-I β-lactamase that is targeted for export via the signal recognition particle (SRP)-dependent pathway. Using an array of native and heterologous proteins, it is demonstrated that periplasmic folding behavior of proteins is intimately coupled to in vivo β-lactamase activity. As a result of this coupling, the reporter is useful for (1) facile discovery of extrinsic periplasmic factors that affect protein folding and solubility; and (2) genetic selection of solubility-enhanced proteins.