The structure of the class C ampC beta-lactamase (cephalosporinase) from Enterobacter cloacae strain P99 has been established by x-ray crystallography to 2-A resolution and compared to a class A beta-lactamase (penicillinase) structure. The binding site for beta-lactam (penicillinase) structure. The binding site for beta-lactam antibiotics is generally more open than that in penicillinases, in agreement with the ability of the class C beta-lactamases to better bind third-generation cephalosporins. Four corresponding catalytic residues (Ser-64/70, Lys-67/73, Lys-315/234, and Tyr-150/Ser-130 in class C/A) lie in equivalent positions within 0.4 A. Significant differences in positions and accessibilities of Arg-349/244 may explain the inability of clavulanate-type inhibitors to effectively inactivate the class C beta-lactamases. Glu-166, required for deacylation of the beta-lactamoyl intermediate in class A penicillinases, has no counterpart in this cephalosporinase; the nearest candidate, Asp-217, is 10 A from the reactive Ser-64. A comparison of overall tertiary folding shows that the cephalosporinase, more than the penicillinase, is broadly similar to the ancestral beta-lactam-inhibited enzymes of bacterial cell wall synthesis. On this basis, it is proposed that the cephalosporinase is the older of the two beta-lactamases, and, therefore, that a local refolding in the active site, rather than a simple point mutation, was required for the primordial class C beta-lactamase to evolve to the class A beta-lactamase having an improved ability to catalyze the deacylation step of beta-lactam hydrolysis.