Identifying target proteins for bioactive molecules is essential for understanding their mechanisms, developing improved derivatives, and minimizing off-target effects. Despite advances in target identification (target-ID) technologies, significant challenges remain, impeding drug development. Most target-ID methods use cell lysates, but maintaining an intact cellular context is vital for capturing specific drug-protein interactions, such as those with transient protein complexes and membrane-associated proteins. To address these limitations, we developed POST-IT (Pup-On-target for Small molecule Target Identification Technology), a non-diffusive proximity tagging system for live cells, orthogonal to the eukaryotic system. POST-IT utilizes an engineered fusion of proteasomal accessory factor A and HaloTag to transfer Pup to proximal proteins upon directly binding to the small molecule. After significant optimization to eliminate self-pupylation and polypupylation, minimize depupylation, and optimize chemical linkers, POST-IT successfully identified known targets and discovered a new binder, SEPHS2, for dasatinib, and VPS37C as a new target for hydroxychloroquine, enhancing our understanding these drugs' mechanisms of action. Furthermore, we demonstrated the application of POST-IT in live zebrafish embryos, highlighting its potential for broad biological research and drug development.