A new method for the synthesis of beta-N-(gamma-l(+)-glutamyl)phenylhydrazine is presented. This compound was prepared from l-glutamine and phenylhydrazine through a transpeptidation reaction of Escherichia coli gamma-glutamyltranspeptidase although phenylhydrazine has been reported to be an inhibitor of the enzyme. The optimum reaction conditions were 60 mM l-glutamine, 300 mM phenylhydrazine, 40 U gamma-glutamyltranspeptidase/ml, and pH 9 in approx. 800 ml. After 6 h at 37 A degrees C, the product was obtained with a conversion rate of 93 % (mol/mol). gamma-Glutamyltranspeptidase was reversibly inhibited only when phenylhydrazine was above 300 mM.