14C-penicillin is irreversibly bound by Bacillus cereus 569. Incubation of penicillin-treated cells in a cell wall digestion medium results in solubilization of approximately 60% of the irreversibly bound lable. The extent of the solubilization is the same when cells are prepared by either a cold or 37 C treatment procedure. However, spheroplasts prepared by the cold treatment are leaky. When the resulting spheroplasts are incubated in supplemented medium, reduced rates and levels of penicillinase synthesis, relative to induced whole-cell controls, are observed. Spheroplasts from both cold and 37 C prepared cells exhibit this phenomena, although the spheroplasts from 37 C prepared cells synthesized approximately sixfold higher levels of penicillinase. The size distribution of the label solubilized during the preparation of spheroplasts was examined by using Bio Gel P-150 columns. Although no label appeared in the exclusion volume fractions when the cell wall digest of the 37 C treated cells was chromatographed, approximately 10% of the label from cold-treated cells did appear. These results suggest that the presence of irreversibly bound penicillin is required for the synthesis of induced levels of penicillinase and that the irreversibly bound penicillin can be solubilized as a labile complex with material which is excluded from BioGel P-150. It may be concluded that the penicillin-binding lipoprotein complex which has been previously observed is the penicillin-specific binding site. However, the location of this complex in relation to the cell membrane could not be determined.