Penicillin kills susceptible bacteria by specifically inhibiting the transpeptidase that catalyzes the final step in cell wall biosynthesis, the cross-linking of peptidoglycan. It was hypothesized (Tipper, D., and Strominger, J. (1965) Proc. Natl. Acad. Sci. U.S.A. 54, 1133-1141) that 1) penicillin is a structural analog of the acyl-D-alanyl-D-alanine terminus of the pentapeptide side chains of nascent peptidoglycan, and that 2) penicillin, by virtue of its highly reactive beta-lactam structure, irreversibly acylates the active site of the cell wall transpeptidase. Although the cell wall transpeptidase has proven elusive, a closely related penicillin-sensitive cell wall enzyme, D-alanine carboxypeptidase, has been purified from membranes of Bacillus stearothermophilus by penicillin affinity chromatography. By amino acid sequence analysis of 14C-labeled cyanogen bromide peptides generated and purified from this carboxypeptidase covalently labeled with either [14C]penicillin G or the substrate, [14C]diacetyl-L-lysyl-D-alanyl-D-lactate, it was shown that the penicillin and substrate were both bound as esters to a serine at residue 36. Therefore, the second hypothesis stated above was proven to be correct for D-alanine carboxypeptidase. Several new methods were developed in the course of this work, including 1) a rapid penicillin-binding assay, 2) use of hydroxylamine to protect peptides against carbamylation during ion exchange chromatography in concentrated urea solutions, and 3) gel filtration chromatography in 70% formic acid, a universal solvent for peptides.