Production of staphylococcal beta-lactamase was shown to be correlated with penicillin G minimum inhibitory concentrations (MICs) of greater than 0.05 microgram/ml for 97% of the Staphylococcus aureus and 99% of the Staphylococcus epidermidis strains tested. However, it is important to note that of the isolates for which MICs were equal to or less than 0.05 micro/ml, a significant percentage (16% of S. aureus and 5% of S. epidermidis) were beta-lactamase producers. Thus, lack of beta-lactamase production, which implies susceptibility to penicillin, cannot be presumed solely on the basis of low MICs. Beta-lactamase production can be easily predicted from disk diffusion susceptibility tests by observing the appearance of the penicillin inhibition zone edge. A sharply demarcated edge was correlated with beta-lactamase production for 100% of the S. aureus and 93% of the S. epidermidis strains tested. The presence of this type of zone edge when a penicillin zone measures in the intermediate or susceptible range indicates that the isolate should be checked for beta-lactamase production.