The interaction between <latex>$\beta$</latex>-lactam antibiotics and the penicillin-sensitive enzymes is a multiple-step process. Binding of the <latex>$\beta$</latex>-lactam ring of the penam (or 3-cephem) nucleus occurs at binding site no. 1. Interaction between the N-14 substituent of the bound molecule and binding site no. 2 induces changes in binding site no. 1. In turn, the catalytic site thus created increases the chemical reactivity of the <latex>$\beta$</latex>-lactam amide bond. As the <latex>$\beta$</latex>-lactam ring opens and acylates an enzyme serine residue, the interaction between the thiazolidine (or dihydrothiazine) ring and binding site no. 3 stabilizes the acyl-enzyme complex. Enzyme regeneration slowly proceeds either by direct elimination of the penicilloyl moiety or via C-5-C-6 splitting of the bound metabolite. The fragment arising from thiazolidine yields free N-formyl-D-penicillamine while the enzyme-linked N-acylglycyl fragment is immediately attacked by an exogenous nucleophile correctly positioned on the acceptor site. Similarly, the enzyme action on L-X-D-Ala-D-Ala terminated peptides is mediated via a binding site no. 1 that combines with D-Ala-D-Ala, a binding site no. 2 that interacts with the side chain of the preceding L-residue, an inducible catalytic site and an acceptor site. Enzymes are known that form a transitory L-X-D-Ala-enzyme complex where the acyl group is ester-linked to the same serine residue as that involved in the formation of the penicilloyl-enzyme complex (Waxman et al., this symposium). Other enzymes, however, may function as catalyst templates. Depending on the enzymes, the independence of the <latex>$\beta$</latex>-lactam and L-X-D-Ala-D-Ala active centres is more or less pronounced.