Two clinically-important beta-lactam antibiotics, cephalothin and cefotaxime, have been observed by X-ray crystallography bound to the reactive Ser62 of the D-alanyl-D-alanine carboxypeptidase/transpeptidase of Streptomyces sp. R61. Refinement of the two crystal structures produced R factors for 3 sigma (F) data of 0.166 (to 1.8 A) and 0.170 (to 2.0 A) for the cephalothin and cefotaxime complexes, respectively. In each complex, a water molecule is within 3.1 and 3.6 A of the acylated beta-lactam carbonyl carbon atom, but is poorly activated by active site residues for nucleophilic attack and deacylation. This apparent lack of good stereochemistry for facile hydrolysis is in accord with the long half-lives of cephalosporin intermediates in solution (20-40 h) and the efficacy of these beta-lactams as inhibitors of bacterial cell wall synthesis. Different hydrogen binding patterns of the two cephalosporins to Thr301 are consistent with the low cefotaxime affinity of an altered penicillin-binding protein, PBP-2x, reported in cefotaxime-resistant strains of Streptococcus pneumoniae, and with the ability of mutant class A beta-lactamases to hydrolyze third-generation cephalosporins.