Recently, TEM beta-lactamase variants with amino acid substitutions in the active-site pocket of the enzyme have been identified in natural isolates with increased resistance to extended-spectrum cephalosporins such as cefotaxime and ceftazidime. To identify other amino acid substitutions that alter the activity of TEM-1 toward extended-spectrum cephalosporins, a random library was constructed that contained all possible amino acid substitutions over the 3-residue window of 238-241 (ABL numbering). Mutants were selected for 100-fold greater ceftazidime resistance than wild-type. All mutants had a serine substitution at position 238, a lysine or arginine at position 240, and a small amino acid at position 241. The role of each substitution was investigated by constructing individual G238S, E240K, and R241G substitutions as well as the G238S:E240K double mutant. Each enzyme was purified to homogeneity and the kinetic parameters kcat and Km were determined using several substrates. The G238S substitution increases catalytic efficiency for both ceftazidime and cefotaxime. However, to achieve large increases in catalytic efficiency, both G238S and the E240K substitutions are required. The R241G substitution results in a small increase in catalytic efficiency for only ceftazidime. The contribution of each residue to the transition-state stabilization energy was found to be additive indicating that the substitutions act independently to change the catalytic properties of the enzyme.