Molecular aspects of penicillin and cephalosporin acylases are reviewed briefly. These are microbial enzymes of industrial importance and an understanding of their structure-function relationships is an indispensible base for obtaining protein engineered molecules with altered substrate specificity. Bacterial penicillin G acylase molecules studied to date are generated.from a single precursor polypeptide by a sequential proteolytic processing pathway leading to the active enzyme molecule consisting of two dissimilar subunits, alpha- and beta-, held together by hydrophobic interactions. Glutaryl 7-amino cephalosporanic acid acylases are also heterodimers derived from a single precursor polypeptide but the processing events vary from that of a penicillin G acylase. The alpha-subunit of penicillin G acylase, particularly the region comprising Met 168, is involved in substrate binding with the hydrophobic side chain of penicillin G. The catalytic site is located in the beta-subunit and Ser 290 is implicated as the active site residue. Sequence homologies among the penicillin and cephalosporin acylases and some of the resemblances between the sequences of these, beta-lactamases and penicillin binding proteins are discussed.