TEM-7, a novel TEM-type beta-lactamase (pI 5.41) encoded on a plasmid of approximately 85 kilobases, was found in a clinical isolate of Citrobacter freundii. Strains containing this enzyme exhibited decreased susceptibility to ceftazidime (64-fold) and aztreonam (16-fold) but not to other third-generation cephalosporins. Addition of a beta-lactamase inhibitor--clavulanic acid, sulbactam, or YTR 830--restored normal susceptibility to associated compounds such as ampicillin, piperacillin, ceftazidime, and aztreonam. DNA-DNA hybridization of an intragenic probe of TEM-1 occurred with a 19-kilobase EcoRI fragment of the plasmid encoding TEM-7. A TEM-2 derivative, TEM-201, with characteristics similar to those of TEM-7 was selected spontaneously in the presence of ceftazidime in vitro.