A strain of Klebsiella oxytoca, originally isolated in Liverpool in 1982, has been found to produce a novel transferable beta-lactamase, TEM-E2. This enzyme confers resistance to ceftazidime and focused as a doublet band with an iso-electric point (pI) of 5.3. The strain also produced the TEM-1 beta-lactamase. Both TEM-1 and TEM-E2 beta-lactamases were encoded by a transferable 103 kb plasmid; these two enzymes also had similar molecular weights, were inhibited by clavulanic acid, and hydrolysed ampicillin, carbenicillin and cephaloridine at similar rates. However, unlike the TEM-1 enzyme, the TEM-E2 beta-lactamase hydrolysed ceftazidime and cefotaxime with similar efficiency, although it conferred much greater resistance to ceftazidime in the host strain. This is the earliest documented example of a TEM-like enzyme which confers transferable resistance to ceftazidime and related cephalosporins.