The deacetoxycephalosporin C (DAOC) synthase (expandase) of Streptomyces lactamdurans was highly purified, as shown by SDS-PAGE and isoelectric focusing. The enzyme catalysed the oxidative ring expansion that converts penicillin N into DAOC. The enzyme was very unstable but could be partially stabilized in 25 mM-Tris/HCl, pH 9.0, in the presence of DTT (0.1 mM). The enzyme required 2-oxoglutarate, oxygen and Fe2+, but did not need ATP, ascorbic acid, Mg2+ or K+. The optimum temperature was between 25 and 30 degrees C. The DAOC synthase showed a high specificity for the penicillin substrate. Only penicillin N but not isopenicillin N, penicillin G or 6-aminopenicillanic acid served as substrates. 2-Oxoglutarate analogues were not used as substrates although 2-oxobutyrate and 3-oxoadipate inhibited the enzyme by 100% and 56% respectively. The enzyme was strongly inhibited by Cu2+, Co2+ and Zn2+. The apparent Km values for penicillin N, 2-oxoglutarate and Fe2+ were 52 microM, 3 microM and 71 microM respectively. The enzyme was a monomer with a molecular mass of 27,000 Da +/- 1,000.