Kinetic parameters are reported for the Bacillus cereus p-lactamase I and p-lactamase II catalysed hydrolysis of esters and lactones of penicillins and cephalosporins. These are compared with the second-order rate constants for the hydroxide-ion catalysed hydrolysis of the same derivatives. The second-order rate constant, kcat/Km, for the hydrolysis of the cephalosporin lactone catalysed by P-lactamase I is 50 times greater than that for an analogous cephalosporin and is 3 x lo4 times greater than that for hydroxide-ion catalysed hydrolysis, a ratio similar t o that for cephalosporins with a carboxylate group at C-4. The methyl ester of benzyl penicillin, but not the corresponding cephalosporanate, is a substrate for P-lactamase I. All ester derivatives are much poorer substrates for plactamase II. The cephalosporin lactone and, t o a lesser extent, the methyl ester of benzyl penicillin can obviously bind t o P-lactamase I even though they d o not possess a formal anionic site at C -4 and C -3 respectively. The esterification of the carboxy group at C -3 in penicillins induces neighbouring-group participation by the C -6 acylamido side chain to give an oxazolinone intermediate. This is attributed t o d iff eren t B ro nsted P, dependency for a I ka I i ne hydro I ysis a nd i n t ra m o lecu la r acy la m ido part ic i pat ion, which exhibits rate limiting C-N bond fission of the p-lactam.