A cephalosporin-hydrolyzing enzyme from strains of Proteus penneri resistant to beta-lactam antibiotics was purified and characterized. The enzyme gave a single protein band on SDS-polyacrylamide gel electrophoresis with a molecular weight of 30,000. This cephalosporinase has an isoelectric point of 6.8, a pH optimum of 6.5 and a temperature optimum of 45 degrees C. The enzyme hydrolyzed cephaloridine, cephalothin, cefuroxime, and cefotaxime more rapidly than penicillins. The relative rate, with cephaloridine as 100, were: cephalothin, 50; cefuroxime, 93; cefotaxime, 48; ceftriaxone, 23; cefoperazone, 11; benzylpenicillin, 3; ampicillin, 9; and carbenicillin, less than 1. Cephamycins had low affinities for the enzyme. However, clavulanic acid and sulbactam, with high affinities for the enzyme, were inhibitors of this enzyme.