Molecular dynamics simulation was performed on class A P-lactamase binding penicillin G (pen G). The structure of the acyl enzyme intermediate (AEI) was derived from the crystallographic data of the clavulanic acid bound enzyme. To execute the simulation precisely, the AEI was solvated by nearly 8000 water molecules and the no-cutoff (NCO) method was applied to the calculation of the Coulomb term. The Coulomb term calculation was accelerated with MDGRAPE-2 hardware. In the first step of this study, the relability of the NCO method was confirmed by comparing experimental and computational B-factors. We confirmed that the NCO method is much more reliable than the particle mesh Ewald and generalized Born methods. Hence the NCO method was applied for the simulation on AEI. The integrated simulation time was 1.2 ns. It was found from the simulation that Ser130, Asn132, Ser235, Gly237, and Arg244 cooperatively restricted the mobility of pen G moiety by making salt bridges among the side chains of these residues and the C3-carboxyl or C6-amide group of the substrate. The oxyanion hole composed of N atom in the main chain of Ser70 and Gly237 was properly reproduced under aqueous condition. The simulation also shows that it is impossible for Glu166 to act as a general base in the acylation of pen G because the average distance between Glu166 carboxyl oxygens and Ser700gamma is too far for direct proton transfer (5.2 and 5.5 Angstrom, respectively) and there is no water molecule between Glu 166 carboxylate and Ser700gamma. Molecular dynamics simulation on the substrate free enzyme (SFE) was also carried out and compared with AEI. While no drastic change due to the substrate binding was observed in both the secondary structure and the positions of catalytic residues of the enzyme, the mobility of the catalytic water molecule was strongly restricted by the presence of the substrate.