beta-lactamase is a bacterial enzyme that catalyzes the hydrolysis of beta-lactam antibiotics such as penicillins and cephalosporins. TEM-1 beta-lactamase is a prevalent beta-lactamase found in Gram-negative bacteria and is capable of hydrolyzing both penicillins and cephalosporins, except for the extended-spectrum cephalosporins. To identify the sequence determinants in the active site for a given antibiotic substrate, random libraries were constructed that each contain all possible amino acid combinations for the designated region of TEM-1 beta-lactamase. To establish the determinants of substrate specificity for cephalosporins versus those for penicillins, these active site libraries have been screened for mutants with high levels of activity for the second generation cephalosporin cephaloridine. Based on the sequence results, substitutions of W165S, A237T, and E240C were identified as cephalosporin-specific. Kinetic analysis of these mutants was done to determine whether each is capable of distinguishing between the two classes of antibiotics. Both the A237T and E240C substitutions, alone or in combination, exhibited increased cephalosporinase activity and decreased penicillinase activity relative to the wild-type enzyme. A sequence comparison between functional mutants selected for cephaloridine hydrolytic activity and functional mutants previously selected for ampicillin hydrolytic activity suggests that TEM-1 beta-lactamase has greater restrictions in maintaining cephalosporinase activity versus maintaining penicillinase activity.