The serine hydroxymethyltransferase (SHMT) gene glyA was over-expressed in Escherichia coli and the enzyme was purified to near homogeneity. Reaction conditions for E. coli and rabbit liver SHMTs were optimized using succinic semialdehyde methyl ester (SSAME) and glycine. The catalytic efficiency (kcat/K(m)) of E. coli SHMT for SSAME was 2.8-fold higher than that of rabbit liver enzyme. E. coli SHMT displayed a pH-dependent product distribution different from that of rabbit liver enzyme. For the pyridoxal-5'-phosphate (PLP)-dependent reaction, E. coli and rabbit liver SHMTs showed a high product diastereospecificity. The stoichiometric ratio of PLP to the dimeric E. coli SHMT was 0.5-0.7, indicating a requirement for external PLP for maximal activity. Using SSAME or its analog at a high temperature, E. coli SHMT mediated efficient condensation via a lactone pathway. In contrast, at a low temperature, the enzyme catalyzed efficient conversion of 4-penten-1-al via a non-lactone mechanism. Efficient conversion of either aldehyde type to a desirable diastereospecific product was observed at a pilot scale. E. coli SHMT exhibited a broad specificity toward aldehyde substrates; thus it can be broadly useful in chemo-enzymatic synthesis of a chiral intermediate in the manufacture of an important carbacephem antibiotic.