Much work has been done to develop tumor-targeting antibodies by selecting a phage antibody library on cancer cell lines. However, when tumor cells are removed from their natural environment, they may undergo genetic and epigenetic changes yielding different surface antigens than those seen in actual cases of cancer. We developed a strategy that allows selection of phage antibodies against tumor cells in situ on both fresh frozen and paraffin-embedded tissues using laser capture microdissection. By restricting antibody selection to binders of internalizing epitopes, we generated a panel of phage antibodies that target clinically represented prostate cancer antigens. We identified ALCAM/MEMD/CD166, a newly discovered prostate cancer marker, as the target for one of the selected antibodies, demonstrating the effectiveness of our approach. We further conjugated two single chain Fv fragments to liposomes and demonstrated that these nanotargeting devices were efficiently delivered to the interior of prostate cancer cells. The ability to deliver payload intracellularly and to recognize tumor cells in situ makes these antibodies attractive candidates for the development of targeted cancer therapeutics.