Penicillin G acylase (PGA; EC 3.5.1.11) is a hydrolytic enzyme that acts on the side chains of penicillin G, cephalosporin G and related antibiotics to produce the P-lactam antibiotic intermediates 6-amino penicillanic acid (6-APA) and 7-amino des-acetoxy cephalosporanic acid (7-ADCA), with phenyl acetic acid (PAA) as a common by-product. These antibiotic intermediates are among the potential building blocks of semi-synthetic antibiotics, such as ampicillin, amoxicillin, cloxacillin, cephalexin, and cefatoxime. Currently, P-lactam antibiotics have annual sales of similar to$15 billion and make up 65% of the total antibiotics market; the annual consumption of PGA is estimated to be in the range of 10 - 30 million tons. The high demand for PGA is being met through a submerged fermentation process that uses genetically manipulated Escherichia coli and Bacillus megaterium microorganisms. Advancements in biotechnology such as screening of microorganisms, manipulation of novel PGA-encoding traits, site-specific mutagenesis, immobilization techniques, and modifications to the fermentation process could enhance the production of PGA. Commercially, cheaper sources of carbohydrates and modified fermentation conditions could lead to more cost-effective production of PGA. These methodologies would open new markets and create new applications of PGA. This article describes the advancements made in PGA biotechnology and advocates its simulation for production of beta-lactam antibiotics. (c) 2007 Elsevier Inc. All rights reserved.