The effect of unreacted residual 2-mercapto-5-methyl-1,3,4-thiadiazole (MMTD), the reagent for 3-[5-methyl-1,3,4-thiadiazole-2-yl]-7-aminocephalosporanic acid (M-7-ACA) synthesis, on the enzymatic acylation of M-7-ACA by the methyl ester of 1,2,3,4-tetrazol-1-acetic acid (MeTzAA) to produce cefazolin (CEZ) was studied. In the two-step process of synthesizing CEZ from 7-aminocephalosporanic acid (7-ACA), one of the key parameters controlling the overall CEZ yield was the ratio of MMTD to 7-ACA in M-7-ACA synthesis. The increase of the ratio showed opposing effects by increasing the M-7-ACA yield in the first step, while decreasing CEZ yield in the subsequent enzymatic reaction by the inhibitory effect of the increased content of MMTD as an impurity in the M-7-ACA preparation. It was revealed that the decrease of CEZ yield in the enzymatic reaction was caused by the selective retardation of the rate of CEZ synthesis reaction by a typical competitive inhibition, while not affecting the rate of MeTzAA hydrolysis reaction. The optimum MMTD-to-7-ACA ratio rendering the highest overall CEZ yield over 7-ACA was 1.2:1.