Although beta-lactamases have generally been considered as being devoid of peptidase activity, a low but significant hydrolysis of various N-acylated dipeptides was observed with representatives of each class of beta-lactamases. The kcat/Km values were below 0.1 M(-1). s(-1), but the enzyme rate enhancement factors were in the range 5000-20000 for the best substrates. Not unexpectedly, the best 'peptidase' was the class C beta-lactamase of Enterobacter cloacae P99, but, more surprisingly, the activity was always higher with the phenylacetyl- and benzoyl-d-Ala-d-Ala dipeptides than with the diacetyl- and alpha-acetyl-l-Lys-d-Ala-d-Ala tripeptides, which are the preferred substrates of the low-molecular-mass, soluble dd-peptidases. A comparison between the beta-lactamases and dd-peptidases showed that it might be as difficult for a dd-peptidase to open the beta-lactam ring as it is for the beta-lactamases to hydrolyse the peptides, an observation which can be explained by geometric and stereoelectronic considerations.