DNA shuffling is a method for in vitro homologous recombination of pools of selected mutant genes by random fragmentation and polymerase chain reaction (PCR) reassembly(1). Computer simulations called genetic algorithms(2-4) have demonstrated the importance of iterative homologous recombination for sequence evolution. Oligonucleotide cassette mutagenesis(5-11) and error-prone PCR are not combinatorial and thus are limited in searching sequence space(1,14). We have tested mutagenic DNA shuffling for molecular evolution(14-18) in a beta-lactamase model system(9,19). Three cycles of shuffling and two cycles of backcrossing with wild-type DNA, to eliminate non-essential mutations, were each followed by selection on increasing concentrations of the antibiotic cefotaxime. We report here that selected mutants had a minimum inhibitory concentration of 640 mu g ml(-1), a 32,000-fold increase and 64-fold greater than any published TEM-1 derived enzyme. Cassette mutagenesis and error-prone PCR resulted in only a 16-fold increase(9).