To streamline in vivo biomarker discovery, we developed a suppression subtractive DNA hybridization technique adapted for phage-displayed combinatorial libraries of 12 amino acid peptides (PhiSSH). Physical DNA subtraction is performed in a one-tube-all-reactions format by sequential addition of reagents, producing the enrichment of specific clones of one repertoire. High-complexity phage repertoires produced by in vivo selections in the multiple sclerosis rat model (experimental autoimmune encephalomyelitis, EAE) and matched healthy control rats were used to evaluate the technique. The healthy repertoire served as a physical DNA subtractor from the EAE repertoire to produce the subtraction repertoire. Full next-generation sequencing (NGS) of the three repertoires was performed to evaluate the efficiency of the subtraction technique. More than 96% of the clones common to the EAE and healthy repertoires were absent from the subtraction repertoire, increasing the probability of randomly selecting various specific peptides for EAE pathology to about 70%. Histopathology experiments were performed to confirm the quality of the subtraction repertoire clones, producing distinct labeling of the blood–brain barrier (BBB) affected by inflammation among healthy nervous tissue or the preferential binding to IL1-challenged vs. resting human BBB model. Combining PhiSSH with NGS will be useful for controlled in vivo screening of small peptide combinatorial libraries to discover biomarkers of specific molecular alterations interspersed within healthy tissues.