The kinetics of cephalexin synthesis and hydrolysis of the activated acyl‐donor precursor phenylglycine methyl ester (PGME) were characterized under a broad range of substrate concentrations. A previously developed model by Youshko‐Svedas involving the formation of the acyl‐enzyme complex followed by binding of the nucleophilic β‐lactam donor does not fully estimate the maximum reaction yields for cephalexin synthesis at different concentrations using initial‐rate data. 7‐aminodesacetoxycephalosporanic acid (7‐ADCA) was discovered to be a potent inhibitor of cephalexin hydrolysis, which may account for the deviation from model predictions. Three kinetic models were compared for cephalexin synthesis, with the model incorporating competitive inhibition due to 7‐ADCA yielding the best fit. Additionally, the βF24A variant and Assemblase® did not exhibit significantly different kinetics for the synthesis of cephalexin compared to the wild‐type, for the concentration range evaluated and for both initial‐rate experiments and time‐course synthesis experiments. Lastly, a continuous stirred‐tank reactor for cephalexin synthesis was simulated using the model incorporating competitive inhibition by 7‐ADCA, with clear tradeoffs observed between productivity, fractional yield, and PGME conversion.