A novel beta-lactamase inhibitor has been isolated from Streptomyces clavuligerus ATCC 27064 and given the name clavulanic acid. Conditions for the cultivation of the organism and detection and isolation of clavulanic acid are described. This compound resembles the nucleus of a penicillin but differs in having no acylamino side chain, having oxygen instead of sulfur, and containing a beta-hydroxyethylidine substituent in the oxazolidine ring. Clavulanic acid is a potent inhibitor of many beta-lactamases, including those found in Escherichia coli (plasmid mediated), Klebsiella aerogenes, Proteus mirabilis, and Staphylococcus aureus, the inhibition being of a progressive type. The cephalosporinase type of beta-lactamase found in Pseudomonas aeruginosa and Enterobacter cloacae P99 and the chromosomally mediated beta-lactamase of E. coli are less well inhibited. The minimum inhibitory concentrations of ampicillin and cephaloridine against beta-lactamase-producing, penicillin-resistant strains of S. aureus, K. aerogenes, P. mirabilis, and E. coli have been shown to be considerably reduced by the addition of low concentrations of clavulanic acid.