Three genes encoding a typical beta-lactamase, a penicillin-binding protein (PBP4) and a transmembrane protein are located in the cluster of cephamycin biosynthetic genes in Nocardia lactamdurans. The similarity of the N. lactamdurans beta-lactamase to class A beta-lactamases from clinical isolates supports the hypothesis that antibiotic resistance genes in pathogenic bacteria are derived from antibiotic-producing organisms. The beta-lactamase is secreted and is active against penicillins (including the biosynthetic intermediates penicillin N and isopenicillin N), but not against cephamycin C. The beta-lactamase is synthesized during the active growth phase, prior to the formation of three cephamycin biosynthetic enzymes. The PBP of N. lactamdurans is a low-M(r) protein that is very similar to DD-carboxypeptidases of Streptomyces and Actinomadura. The pbp gene product expressed in Streptomyces lividans accumulates in the membrane fraction. By disruption of N. lactamdurans protoplasts, the PBP4 was shown to be located in the plasma membrane. Eight PBPs were found in the membranes of N. lactamdurans, none of which bind cephamycin C, which explains the resistance of this strain to its own antibiotic. A transmembrane protein encoded by the cmcT gene of the cluster also accumulates in the membrane fraction and is probably related to the control of synthesis and secretion of the antibiotic. A balanced synthesis of beta-lactam antibiotics, beta-lactamase and PBP is postulated to be critical for the survival of beta-lactam-producing actinomycetes.