Metallo-beta-lactamases are zinc-dependent enzymes responsible for resistance to beta-lactam antibiotics in a variety of host bacteria, usually Gram-negative species that act as opportunist pathogens. They hydrolyze all classes of beta-lactam antibiotics, including carbapenems, and escape the action of available beta-lactamase inhibitors. Efforts to develop effective inhibitors have been hampered by the lack of structural information regarding how these enzymes recognize and turn over beta-lactam substrates. We report here the crystal structure of the Stenotrophomonas maltophilia L1 enzyme in complex with the hydrolysis product of the 7alpha-methoxyoxacephem, moxalactam. The on-enzyme complex is a 3'-exo-methylene species generated by elimination of the 1-methyltetrazolyl-5-thiolate anion from the 3'-methyl group. Moxalactam binding to L1 involves direct interaction of the two active site zinc ions with the beta-lactam amide and C4 carboxylate, groups that are common to all beta-lactam substrates. The 7beta-[(4-hydroxyphenyl)malonyl]-amino substituent makes limited hydrophobic and hydrogen bonding contacts with the active site groove. The mode of binding provides strong evidence that a water molecule situated between the two metal ions is the most likely nucleophile in the hydrolytic reaction. These data suggest a reaction mechanism for metallo-beta-lactamases in which both metal ions contribute to catalysis by activating the bridging water/hydroxide nucleophile, polarizing the substrate amide bond for attack and stabilizing anionic nitrogen intermediates. The structure illustrates how a binuclear zinc site confers upon metallo-beta-lactamases the ability both to recognize and efficiently hydrolyze a wide variety of beta-lactam substrates.