An Mg2+ and ATP dependent beta-lactam synthetase (BLS) catalyses formation of a beta-lactam ring during the biosynthesis of clavulanic acid, an important beta-lactamase inhibitor. An epimeric mixture of a 2-methylated derivative of the natural BLS substrate N2-(2-carboxyethyl)-L-arginine was synthesised and found to be a substrate for the enzyme. The epimeric products were characterised by 1H NMR and mass spectrometric analyses. The results suggest that a modified version of BLS might be used to catalyse the preparation of intermediates useful for the synthesis of beta-lactam antibiotics.