We introduced random mutations into three locally isolated strains of Escherichia coli using the mutagen N-methyl-N′-nitro-N-nitrosoguanidine (MNNG) at concentrations ranging from 50 to 200 μg/ml. Viable colonies were screened for mutants with an increased production of penicillin G acylase (PGA) and a reduced production of β-lactamase, which are desired properties of industrial strains. Surviving colonies were recorded and, to determine the best level of mutagenesis, survival curves of E. coli strains exposed to different concentrations of MNNG for different time intervals were constructed. A total of 120 mutants were selected from mutagen-treated colonies and characterized for the response of surviving cells in terms of PGA and β-lactamase expression. Our results indicated that the frequency of β-lactamasedeficient mutants was significantly higher (73%) compared to PGA-deficient mutants (26%) in the mutants obtained. Fifty percent of the mutants exhibited higher PGA activity, 24% had PGA activity equal to or lower than the parent strain, while the remaining 26% had lost PGA activity due to the mutagenic effect of MNNG. The best MNNG-induced mutant strain, BDCS-N-W50 M38 , exhibited considerably increased potential for PGA (fourfold higher) and negligible expression of β-lactamase compared to that of the parent strain. We estimated, for the first time, the average spontaneous mutation rate in PGAproducing wild-type parent and in the MNNG-induced mutants using the Luria-Delbruck fluctuation assay; this rate was found to range from 4.4×10 −7 to 5.6×10 −7 mutations per cell division.