The steady-state kinetics and mechanism of the hydrolysis and aminolysis of a series of acyclic depsipeptides, catalyzed by the class C beta-lactamase of Enterobacter cloacae P99, have been studied in order to more firmly establish the nature of the transition states involved. The class C beta-lactamase of Enterobacter cloacae P99 was employed. The depsipeptide substrates contained a constant acyl group, (phenylacetyl)glycyl, and chemically different leaving groups, m-carboxyphenoxide, m-carboxythiophenoxide, 3-carboxyl-4-nitrophenoxide, lactate, and thiolactate. Evaluation of the steady-state kinetic parameters and the effect of the alternative nucleophile methanol on these parameters and on the product distribution showed that deacylation was largely rate-determining to turnover of the aryl esters under conditions of substrate saturation, while acylation was rate-determining to the alkyl esters. The earlier conclusion [Govardhan & Pratt (1987) Biochemistry 26, 3385-3395] that acylation largely limited the turnover of the aryl esters was shown to be an artifact of phosphate buffer inhibition. The aminolysis of both the aryl the alkyl esters by D-phenylalanine was influenced by binding of the substrate at a second binding site on the acyl-enzyme intermediate. A study of inhibiton of the hydrolysis of (phenylacetyl)-glycyl-D-thiolactate by the aminolysis product (phenylacetyl)glycyl-D-phenylalanine indicated that the second binding site is also available for ligands to bind the free enzyme and to the noncovalent Michaelis complex with this substrate. It is likely that penicillin-recognizing enzymes in general, both beta-lactamases and DD-peptidases, possess an extended substrate-binding site into which a variety of small ligands may bind at any point along the reaction coordinate and, to a greater or lesser extent depending on circumstances, affect catalysis.