Group I beta -lactamases are major resistance determinants to beta -lactam antibiotics. Despite intense study, the identity of the catalytic base, the direction of hydrolytic attack, and the functional difference between beta -lactam substrates and beta -lactam inhibitors remain controversial. To explore these questions, we determined the X-ray crystal structures of several representative beta -lactams in their acyl-adduct complexes with the group I beta -lactamase AmpC. A complex with the substrate Ioracarbef and a deacylation-deficient mutant enzyme reveals an ordered water molecule that is consistent with beta -face attack of the catalytic water in group I beta -lactamases; The ring nitrogen of the substrate is placed to hydrogen-bond with this water in the position it is thought to adopt in the deacylation transition state. In complexes with the inhibitors cloxacillin and moxalactam, conformational restrictions displace the equivalent ring nitrogens, sterically blocking the formation of the presumed deacylation transition-state structure. In conjunction with earlier studies, these acyl-enzyme structures suggest that both Tyr150 and the ring nitrogen of the substrate itself stabilize the hydrolytic transition state, and that beta -lactam inhibitors of group I beta -lactamases can act by physically blocking this activation.