Cell-free extracts of Streptomyces sp. DRS I converted ampicillin to cephalexin, presumably due to the activity of the enzyme, expandase. The extract was fractionated and characterized by colorimetric and chromatographic measurements coupled with disc-agar diffusion bioassay against an ampicillin-resistant, cephalexin-sensitive E. coli strain. Though expandase could not be identified, the presence of a hitherto unreported expandase in Streptomyces sp. DRS I is suggested.