The isopenicillin-N acyltransferase of Penicillium chrysogenum catalyzes the conversion of the biosynthetic intermediate isopenicillin N to the hydrophobic penicillins. The isopenicillin-N acyltransferase copurified with the acyl-CoA:6-aminopenicillanic acid (6-APA) acyltransferase activity which transfers an acyl residue from acyl-CoA derivatives (e.g. phenylacetyl-CoA, phenoxyacetyl-CoA) to 6-APA. Other thioesters of phenylacetic acid were also used as substrates. An amino acid sequence similar to that of the active site of thioesterases was found in the isopenicillin-N acyltransferase, suggesting that this site is involved in the transfer of phenylacetyl residues from phenylacetyl thioesters. Purified isopenicillin-N acyltransferase also showed isopenicillin-N amidohydrolase, penicillin transacylase and penicillin amidase activities. The isopenicillin-N amidohydrolase (releasing 6-APA) showed a much lower specific activity than the isopenicillin-N acyltransferase of the same enzyme preparation, suggesting that in the isopenicillin-N acyltransferase reaction the 6-APA is not released and is directly converted into benzylpenicillin. Penicillin transacylase exchanged side chains between two hydrophobic penicillin molecules; or between one penicillin molecule and 6-APA. The penicillin amidase activity is probably the reverse of the biosynthetic acyl-CoA:6-APA acyltransferase. Four P. chrysogenum mutants deficient in acyl-CoA:6-APA acyltransferase lacked the other four related activities. Transformation of these mutants with the penDE gene restored all five enzyme activities.