Kinetic parameters are reported for the Bacillus cereus-lactamase I and -lactamase II catalysed hydrolysis of esters and lactones of penicillins and cephalosporins. These are compared with the second-order rate constants for the hydroxide-ion catalysed hydrolysis of the same derivatives. The second-order rate constant, kcat/Km for the hydrolysis of the cephalosporin lactone catalysed by -lactamase I is 50 times greater than that for an analogous cephalosporin and is 3 × 104 times greater than that for hydroxide-ion catalysed hydrolysis, a ratio similar to that for cephalosporins with a carboxylate group at C-4. The methyl ester of benzyl penicillin, but not the corresponding cephalosporanate, is a substrate for -lactamase I. All ester derivatives are much poorer substrates for -lactamase II. The cephalosporin lactone and, to a lesser extent, the methyl ester of benzyl penicillin can obviously bind to -lactamase I even though they do not possess a formal anionic site at C-4 and C-3 respectively. The esterification of the carboxy group at C-3 in penicillins induces neighbouring-group participation by the C-6 acylamido side chain to give an oxazolinone intermediate. This is attributed to different Brönsted 1g dependency for alkaline hydrolysis and intramolecular acylamido participation, which exhibits rate limiting C–N bond fission of the -lactam.