D-(-)-Phenylglycyl-beta-lactamide amidohydrolase was isolated from Xanthomonas sp., purified, and characterized. A characteristic feature of the enzyme is its high specificity for substrates containing an alpha-aminophenylacetic group in the acyl moiety. Cephalexin and D-C-(-)-phenylglycine methyl ester (MEPG), being nonspecific penicillin acylase (EC 3.5.1.11) substrates, have the highest values of bimolecular constant kcat/Km (2.8 x 10(5) and 2.0 x 10(5) M-1 x s-1, respectively) in the case of amidohydrolase. On the contrary, benzylpenicillin is not hydrolyzed by D-(-)-phenylglycyl-beta-lactamide amidohydrolase. The other peculiarity of the enzyme is its affinity for the charged forms of substrates. Using the amidohydrolase, it was found that the values of delta Go'pH7.0 for hydrolysis of the amide bond in cephalexin and ampicillin are -3.3 and -2.3 kJ mol-1, respectively. They are less by a minimum of 2.7 kJ mol-1 than those for other beta-lactam antibiotics. Detailed thermodynamic and kinetic studies of the synthesis of cephalexin from MEPG and 7-aminodeacetoxycephalosporanic acid (7-ADCA) catalyzed by D-(-)-phenylglycyl-beta-lactamide amidohydrolase were undertaken. A kinetic scheme is proposed which describes well the experimental curves. The value of conversion of "nucleus" was found to be 76% when the synthesis was carried out from a 31.5 mM solution of 7-ADCA and an 88.5 mM solution of MEPG at pH 6.2 (optimum conditions). A 75% conversion of 7-aminocephalosporanic acid (7-ACA) was achieved in the synthesis of cephaloglycine catalyzed by D-(-)-phenylglycyl-beta-lactamide amidohydrolase.