<jats:p>Deacetoxycephalosporin C synthase (DAOCS) catalyses the oxidative ring expansion of penicillin N, the committed step in the biosynthesis of cephamycin C by <jats:italic>Streptomyces clavuligerus</jats:italic>. Site‐directed mutagenesis was used to investigate the seven Arg residues for activity (74, 75, 160, 162, 266, 306 and 307), selected on the basis of the DAOCS crystal structure. Greater than 95% of activity was lost upon mutation of Arg‐160 and Arg266 to glutamine or other residues. These results are consistent with the proposed roles for these residues in binding the carboxylate linked to the nucleus of penicillin N (Arg160 and Arg162) and the carboxylate of the α‐aminoadipoyl side‐chain (Arg266). The results for mutation of Arg74 and Arg75 indicate that these residues play a less important role in catalysis/binding. Together with previous work, the mutation results for Arg306 and Arg307 indicate that modification of the C‐terminus may be profitable with respect to altering the penicillin side‐chain selectivity of DAOCS.