Efficient hydrolysis of penicillin G to 6-APA has been studied using the enzyme produced by $\mbox{\underline{Micrococcus}}$ $\mbox{\underline{luteus}}$ that is known to catalyze the hydrolytic and synthetic reaction on $\beta$-lactam antibiotics. Several factors affecting the production of the hydrolytic enzyme during fermentation have been studied. The optimal reaction condition was also studied. The enzyme productivity was increased to 2 times of the original value by improving the conditions for enzyme production such as initial pH of medium, aeration, and inducer addition, and by optimizing the reaction conditions including reaction pH and temperature. The other biochemical properties of the whole cell enzyme were also examined. This enzyme showed first-order decay at 36$^\circ$C. And this enzyme showed substrate inhibition at high concentration of penicillin G. This whole cell enzyme could deacylate penicillin G, penicillin V, ampicillin, and cephalexin, but not cephalosporin C. Purification procedure of 6-APA from reaction mixture was developed by slight modification of the existing method, and good result was obtained. This strain also produced the synthetic enzyme on cephalexin and ampicillin, but its productivity was low.