The X-ray structure of Escherichia coli TEM1 beta-lactamase has been refined to a crystallographic R-factor of 16.4% for 22,510 reflections between 5.0 and 1.8 A resolution; 199 water molecules and 1 sulphate ion were included in refinement. Except for the tips of a few solvent-exposed side chains, all protein atoms have clear electron density and refined to an average atomic temperature factor of 11 A2. The estimated coordinates error is 0.17 A. The substrate binding site is located at the interface of the two domains of the protein and contains 4 water molecules and the sulphate anion. One of these solvent molecules is found at hydrogen bond distance from S70 and E166. S70 and S130 are hydrogen bonded to K73 and K234, respectively. It was found that the E. coli TEM1 and Staphylococcus aureus PC1 beta-lactamases crystal structures differ in the relative orientations of the two domains composing the enzymes, which result in a narrowed substrate binding cavity in the TEM1 enzyme. Local but significant differences in the vicinity of this site may explain the occurrence of TEM1 natural mutants with extended substrate specificities.