Molecular information about family VIII esterases, which have similarities with class C β-lactamases and penicillin-binding proteins, remains largely unknown. In this study, a novel family VIII esterase with β-lactamase activity (PsEstA) from Paenibacillus sp. was characterized using several biochemical and biophysical methods. PsEstA was effective on a broad range of substrates including tertiary butyl acetate, glyceryl tributyrate, glucose pentaacetate, olive oil, and p-nitrophenyl esters. Additionally, PsEstA hydrolyzed nitrocefin, cefotaxime, and 7-aminocephalosporanic acid. Interestingly, two forms of immobilized PsEstA (CLEAs-PsEstA and mCLEAs-PsEstA) showed high recycling property and enhanced stability, but hybrid nanoflowers (hNFs) of PsEstA require improvement. This study provides a molecular understanding of substrate specificities, catalytic regulation, and immobilization of PsEstA, which can be efficiently used in biotechnological applications.