By using cell-free extracts of Streptomyces clavuligerus containing deacetoxycephalosporin C synthase, we Can convert penicillin G into deacetoxycephalosporin G. The degree of bioconversion was low (below 1% based on charged substrate) and decreased as substrate concentration was increased. Formation of product occurred during the first 2 h and then ceased. Addition of increasing levels of cofactors and/or substrate at the 2-h point did not result in more product. Preincubation of the crude extracts in the presence of ferrous ions plus either ascorbate or alpha-ketoglutarate led to complete loss of activity. Such inactivation could not be reversed by catalase, superoxide dismutase, mannitol, thiourea, dimethylsulfoxide, dithiothreitol, or beta-mercaptoethanol.