The deacetoxycephalosporin C synthase (DAOCS) from Streptomyces clavuligerus was engineered with the aim of enhancing the conversion of penicillin G into phenylacetyl-7-aminodeacetoxycephalosporanic acid, a precursor of 7-aminodeacetoxycephalosporanic acid, for industrial application. A single round of random mutagenesis followed by the screening of 5,500 clones identified three mutants, G79E, V275I, and C281Y, that showed a two- to sixfold increase in the k(cat)/K(m) ratio compared to the wild-type enzyme. Site-directed mutagenesis to modify residues surrounding the substrate resulted in three mutants, N304K, I305L, and I305M, with 6- to 14-fold-increased k(cat)/K(m) values. When mutants containing all possible combinations of these six sites were generated to optimize the ring expansion activity for penicillin G, the double mutant, YS67 (V275I, I305M), showed a significant 32-fold increase in the k(cat)/K(m) ratio and a 5-fold increase in relative activity for penicillin G, while the triple mutant, YS81 (V275I, C281Y, I305M), showed an even greater 13-fold increase in relative activity toward penicillin G. Our results demonstrate that this is a robust approach to the modification of DAOCS for an optimized DAOCS-penicillin G reaction.