The bioconversion of penicillin G to deacetoxycephalosporin G (DAOG) using resting cells of Streptomyces clavuligerus could be a very valuable step in the economical production of semisynthetic cephalosporin antibiotics. The extent of the reaction, however, is very low due to inactivation of the ring expansion enzyme deacetoxycephalosporin C synthetase ("expandase") by reaction components. We show that elimination of agitation during the reaction lowers the rate but increases the amount of DAOG produced, presumably because the inactivation requires high levels of oxygen. Many additives to the medium were examined for their effect on the reaction. Clearly, the most effective com-pound was the organic solvent, decane.