Ring expansion of the five-membered thiazolidine ring of the intermediate penicillin N to the six-membered dihydrothiazine ring of deacetoxycephalosporin C (DAOC) (Figure 4.1) was discovered by Kohsaka and Demain [1] working with cell-free extracts of Acremonium chrysogenum (formerly Cephalosporium acremonium). DAOC synthase (deacetoxycephalosporin C synthaseDAOCS; also known as expandase) is a crucial enzyme responsible for converting penicillins to cephalosporins. In cephalosporin producers, A. chrysogenum and Streptomyces clavuligerus, expandase is an iron-and a-ketoglutarate-dependent enzyme. In the bacterium, S. clavuligerus, the subsequent hydroxylation of the methyl group of DAOC to give deacetylcephalosporin C (DAC) is catalyzed by a closely related enzyme, DAC synthase (deacetylcephalosporin C synthase DACS), whereas in the fungus A. chrysogenum, the activities of expandase and hydroxylase reside in a single functional protein (Figure 4.1).The bifunctional expandase of A. chrysogenum is a monomer with a molecular weight of 41 kDa and an isoelectric point (pI) of 6.3 [2]. It is a bifunctional enzyme that catalyzes not only ring expansion but also the hydroxylation of the methyl group of DAOC to DAC. Expandase exhibited properties of a-ketoglutarate-linked dioxygenases [3]. Ring expansion activity was markedly increased by ascorbic acid, Fe þ 2 [4, 5], a-ketoglutarate [4, 6], oxygen [6,7], dithiothreitol (DTT), and ATP. The enzyme showed an absolute requirement for a-ketoglutarate [4, 8-10] and this cosubstrate could not be replaced by chemically related compounds such as a-ketoadipate, pyruvate, oxaloacetate, glutamate, succinate, a-ketovalerate, or a-ketobutyrate [11][12][13]. The properties of the expandase are similar to those of other a-ketoglutarate-dependent dioxygenases that incorporate one atom of oxygen into a-ketoglutarate to form succinate and the other atom into the product molecule. However, expandase differs in that no oxygen atom appears in its ring expansion product, DAOC. When isopenicillin N, penicillin G, penicillin V, ampicillin, and 6-aminopenicillanic acid (6-APA) were tested as substrate analogs of penicillin N, no ring expansion was observed [2,11,14].