An economical process for the enzymatic oxidation of cephalosporin C to glutaryl-7-ACA was developed at a pilot plant scale. The process utilized nonviable whole cells of the yeast Triginopsis variabilis containing high levels of D-amino acid oxidase. Prior to use, the whole cells were permeabilized with a 25% acetone/water solution which enhanced their apparent activity by 20- to 50-fold. After permeabilization, the whole cells were incubated at pH 11, which served to selectively deactivate catalase which was present in very large quantities. Deactivation of catalase was critical to achieving high reaction yields. The whole cells were utilized within a "cross-flow filter-reactor" which allowed easy and economical recycle of the cells for repeated use. The overall yield of glutaryl-7-ACA from cephalosporin C was 90-95%. The overall productivity of the yeast was 13 kg cephalosporin C oxidized per kilogram yeast (dry basis). The reaction was run at a concentration of 40 g cephalosporin CL-1 and the overall reactor productivity was 11 g glutaryl-7-ACA l-1 h-1. The process has been thoroughly demonstrated on a 35-l scale, and it should be directly scaleable to 10,000 l or more.