Extended-spectrum beta-lactamases (ESBLs) are a rapidly evolving group of beta-lactamases which share the ability to hydrolyze third-generation cephalosporins and aztreonam yet are inhibited by clavulanic acid. Typically, they derive from genes for TEM-1, TEM-2, or SHV-1 by mutations that alter the amino acid configuration around the active site of these beta-lactamases. This extends the spectrum of beta-lactam antibiotics susceptible to hydrolysis by these enzymes. An increasing number of ESBLs not of TEM or SHV lineage have recently been described. The presence of ESBLs carries tremendous clinical significance. The ESBLs are frequently plasmid encoded. Plasmids responsible for ESBL production frequently carry genes encoding resistance to other drug classes (for example, aminoglycosides). Therefore, antibiotic options in the treatment of ESBL-producing organisms are extremely limited. Carbapenems are the treatment of choice for serious infections due to ESBL-producing organisms, yet carbapenem-resistant isolates have recently been reported. ESBL-producing organisms may appear susceptible to some extended-spectrum cephalosporins. However, treatment with such antibiotics has been associated with high failure rates. There is substantial debate as to the optimal method to prevent this occurrence. It has been proposed that cephalosporin breakpoints for the Enterobacteriaceae should be altered so that the need for ESBL detection would be obviated. At present, however, organizations such as the Clinical and Laboratory Standards Institute (formerly the National Committee for Clinical Laboratory Standards) provide guidelines for the detection of ESBLs in klebsiellae and Escherichia coli. In common to all ESBL detection methods is the general principle that the activity of extended-spectrum cephalosporins against ESBL-producing organisms will be enhanced by the presence of clavulanic acid. ESBLs represent an impressive example of the ability of gram-negative bacteria to develop new antibiotic resistance mechanisms in the face of the introduction of new antimicrobial agents.