1. The penicillinases formed by penicillinase-constitutive mutant strains from two closely related varieties (749 and 6346) of Bacillus licheniformis have been isolated, characterized and compared. They are chemically, physicochemically and immunologically very similar, but differ enzymologically in absolute and relative activity on, and affinity for, different penicillins and cephalosporins. 2. The molecular weights of both types are approx. 23000. Neither enzyme contains any cyst(e)ine. However, in most other respects they show little resemblance to any of the other penicillinases so far isolated. 3. Their properties, whether isolated from cells (to which approx. 50% of the activity is normally bound) or from the culture supernatant, appear to be similar. However, the molecular weight of a preparation of enzyme from strain 749/C obtained from the culture supernatant was found to be significantly (over 20%) higher than that obtained from cells alone. 4. With benzylpenicillin, the enzyme from strain 749 has V(max.) approx. 6 times higher than that of the enzyme from strain 6346, but this difference is ;compensated' by its affinity being 6 times lower. Thus, at the very low biologically effective concentrations of penicillin met with under natural conditions, where neither type of enzyme is more than a fraction saturated with its substrate, the antibiotic is hydrolysed at the same rate by both. As expected, the penicillin-sensitivities of single cells from the two strains were found to be identical. 5. It is suggested that the concept of ;physiological efficiency' (defined as V(max.) divided by K(m)), applied to enzymes acting naturally under conditions of poor saturation with their substrates, may be useful for expressing their biological function in vivo.