Class A penicillin-binding proteins (PBPs) catalyze the last two steps in the biosynthesis of peptidoglycan, a key component of the bacterial cell wall. Both reactions, glycosyl transfer (polymerization of glycan chains) and transpeptidation (cross-linking of stem peptides), are essential for peptidoglycan stability and for the cell division process, but remain poorly understood. The PBP-catalyzed transpeptidation reaction is the target of beta-lactam antibiotics, but their vast employment worldwide has prompted the appearance of highly resistant strains, thus requiring concerted efforts towards an understanding of the transpeptidation reaction with the goal of developing better antibacterials. This goal, however, has been elusive, since PBP substrates are rapidly deacylated. In this work, we provide a structural snapshot of a "trapped" covalent intermediate of the reaction between a class A PBP with a pseudo-substrate, N-benzoyl-D-alanylmercaptoacetic acid thioester, which partly mimics the stem peptides contained within the natural, membrane-associated substrate, lipid II. The structure reveals that the D-alanyl moiety of the covalent intermediate (N-benzoyl-d-alanine) is stabilized in the cleft by a network of hydrogen bonds that place the carbonyl group in close proximity to the oxyanion hole, thus mimicking the spatial arrangement of beta-lactam antibiotics within the PBP active site. This arrangement allows the target bond to be in optimal position for attack by the acceptor peptide and is similar to the structural disposition of beta-lactam antibiotics with PBP clefts. This information yields a better understanding of PBP catalysis and could provide key insights into the design of novel PBP inhibitors.