The initial acylation step in the beta-lactamase catalyzed hydrolysis of beta-lactams is studied using an ab initio quantum mechanical approach. The computational model incorporates a simple beta-lactam substrate and key residues found in the active site in order to assess the plausibility of a specific mechanism originally proposed by Strynadka et al.(1) and to estimate the stabilizing effects of the oxy-anion hole components founds in these enzymes. The computational model was constructed using information obtained from a high resolution X-ray crystal structure of unbound native beta-lactamase, isolated from Staphylococcus aureus PC1. Within this model, the overall acylation reaction was found to occur with modest activation energy <26 kcal mol(-1) (<109 kT mol(-1)) through a microscopic pathway characterized by discrete proton transfer steps between the substrate and the active site residues Ser-70, Lys-73, and Ser-130. These energetic results are considerably lower than the activation energies found for the uncatalyzed hydrolysis of simple amides in the gas phase. Interestingly, the energetic stabilization of the components, which make up the oxy-anion hole, were found to be modest with only one stationary point on the potential energy surface being significantly reduced by similar to 8 kcal mol(-1) (similar to 33 kJ mol(-1)).