Efforts to combine advantages of fragment-based drug design (FBDD) and dynamic combinatorial chemistry (DCC) for the development of selective α-glucosidase inhibitors were described. Starting from 5 rationally designed fragments, two iterative dynamic combinatorial libraries (DCLs) comprising 29 acylhydrazone products were generated and screened using α-glucosidase and α-amylase as the templates. The optimal ligand identified showed substantial α-glucosidase inhibition with high selectivity over α-amylase as well as low cytotoxicity. Furthermore, inhibition type and detailed ligand/enzyme binding interactions were elucidated by the binding kinetic study and docking simulation, respectively.