Pseudomonas cepacia has an inducible beta-lactamase which is responsible for its novel ability to catabolize beta-lactam compounds. The gene encoding this enzyme, penA, was cloned from a genomic library of P. cepacia 249 on the broad-host-range cosmid pLAFR. This separated the penA gene from the gene encoding a second beta-lactamase in P. cepacia 249. Expression of penA was inducible in an Escherichia coli host strain by low levels of penicillin. The 33,500-molecular-weight enzyme had penicillinase activity not inhibited by clavulanic acid or sulbactam and was highly active against piperacillin and azlocillin. In comparison with other inducible beta-lactamases produced by gram-negative organisms, the penA enzyme had many properties which were similar to those of the penicillinase produced by Alcaligenes faecalis. It was unlike the ampC-type cephalosporinase produced by Pseudomonas aeruginosa.