The deacetoxycephalosporin C synthase from Streptomyces clavuligerus was directly modified for enhancement of penicillin G expansion into phenylacetyl-7-aminodeacetoxycephalosporanic acid, an important intermediate in the industrial manufacture of cephalosporin antibiotics. Nine new mutants, mutants M73T, T91A, A106T, C155Y, Y184H, M188V, M188I, H244Q, and L277Q with 1.4- to 5.7-fold increases in the kcat/Km ratio, were obtained by screening 6,364 clones after error-prone PCR-based random mutagenesis. Subsequently, DNA shuffling was carried out to screen possible combinations of substitutions, including previous point mutations. One quaternary mutant, the C155Y/Y184H/V275I/C281Y mutant, which had a kcat/Km ratio that was 41-fold higher was found after 10,572 clones were assayed. The distinct mutants obtained using different mutagenesis methods demonstrated the complementarity of the techniques. Interestingly, most of the mutated residues that result in enhanced activities are located within or near the unique small barrel subdomain, suggesting that manipulation of this subdomain may be a constructive strategy for improvement of penicillin expansion. Several mutations had very distinct effects on expansion of penicillins N and G, perhaps due to different penicillin-interacting modes within the enzyme. Thus, the present study provided not only promising enzymes for cephalosporin biosynthesis but also a large number of mutants, which provided new insights into the structure-function relationship of the protein that should lead to further rational engineering.