The function of the hydroxyl group of the tyrosine residue readily nitrated by tetranitromethane (tyrosine-105) in the RTEM plasmid-derived beta-lactamase (penicillinase; penicillin amido beta-lactam-hydrolase, EC 3.5.1.6) from E. coli and in Bacillus cereus beta-lactamase I has been investigated by chemical modification methods. In the case of B. cereus beta-lactamase I the nitrated tyrosine can be acetylated by acetic anhydride without effect on beta-lactamase activity The nitrated tyrosine of the E. coli enzyme can also be acetylated but in this case beta-lactamase activity is lost in a manner which directly correlates with extent of acetylation. However, deacetylation of the nitrotyrosine does not restore activity. The dilemma created by the latter result has been resolved by development of a new method of tyrosine hydroxyl modification at low pH. The nitrated enzyme is reduced by dithionite and then treated with either carbonyldiimidazole or N-(2.2.2-trifluoroethoxycarbonyl)imidazole, both of which convert 3-aminotyrosine into benzoxazolinonylalanine. That the final modification has been achieved is demonstrated both by classical chemical methods and by employment of Fourier transform infrared spectroscopy to detect the characteristic benzoxazolinone carbonyl absorption. Further, it is shown that no significant loss of beta-lactamase activity is associated with this modification. Hence in neither the B. cereus or the E. coli enzyme does the readily nitrated tyrosine residue have a direct chemical function at the beta-lactamase active site.