Proclavaminate amidino hydrolase (PAH) catalyzes the reaction of guanidinoproclavaminic acid to proclavaminic acid and urea, a central step in the biosynthesis of the beta-lactamase inhibitor clavulanic acid. The gene encoding this enzyme (pah) was tentatively identified within the clavulanic acid biosynthetic cluster in Streptomyces clavuligerus by translation to a protein of the correct molecular mass (33 kDa) and appreciable sequence homology to agmatine ureohydrolase (M.B.W. Szumanski and S.M. Boyle, J. Bacteriol. 172:538-547, 1990) and several arginases, a correlation similarly recognized by Aidoo et al. (K. A. Aidoo, A. Wong, D. C. Alexander, R. A. R. Rittammer, and S. E. Jensen, Gene 147:41-46, 1994). Overexpression of the putative open reading frame as a 76-kDa fusion to the maltose-binding protein gave a protein having the catalytic activity sought. Cleavage of this protein with factor Xa gave PAH whose N terminus was slightly modified by the addition of four amino acids but exhibited unchanged substrate specificity and kinetic properties. Directly downstream of pah lies the gene encoding clavaminate synthase 2, an enzyme that carries out three distinct oxidative transformations in the in vivo formation of clavulanic acid. After the first of these oxidations, however, no further reaction was found to occur in vitro without the intervention of PAH. We have demonstrated that concurrent use of recombinant clavaminate synthase 2 and PAH results in the successful conversion of deoxyguanidinoproclavaminic acid to clavaminic acid, a four-step transformation. PAH has a divalent metal requirement, pH activity profile, and kinetic properties similar to those of other proteins of the broader arginase class.