Single-domain antibody fragments (VHHs) have several beneficial properties as compared to conventional antibody fragments. However, their small size complicates their toxin- and virus-neutralizing capacity. We isolated 27 VHHs binding Escherichia coli heat-labile toxin and expressed these in Saccharomyces cerevisiae. The most potent neutralizing VHH (LT109) was N-glycosylated, resulting in a large increase in molecular mass. This suggests that N-glycosylation of LT109 improves its neutralizing capacity. Indeed, deglycosylation of LT109 decreased its neutralizing capacity three- to fivefold. We also studied the effect of glycosylation of two previously isolated VHHs on their ability to neutralize foot-and-mouth disease virus. For this purpose, these VHHs that lacked potential N-glycosylation sites were genetically fused to another VHH that was known to be glycosylated. The resulting fusion proteins were also N-glycosylated. They neutralized the virus at at least fourfold-lower VHH concentrations as compared to the single, non-glycosylated VHHs and at at least 50-fold-lower VHH concentrations as compared to their deglycosylated counterparts. Thus, we have shown that N-glycosylation of VHHs contributes to toxin- and virus-neutralizing capacity.