Four ceftazidime-resistant Escherichia coli strains were isolated from elderly nursing home patients in a New York hospital during 1993. Strains MCQ-2, MCQ-3, and MCQ-4 were determined to be identical by pulsed-field gel electrophoresis and plasmid profiles, whereas strain MCQ-1 was unique. Strain MCQ-1 was determined to produce a TEM-10 beta-lactamase. Strains MCQ-2, MCQ-3, and MCQ-4 were also noted to be resistant to cefotaxime. These three strains produced two beta-lactamases with pIs of 5.4 (TEM-1) and 7.6. beta-Lactamase assays revealed that the pI 7.6 enzyme hydrolyzed cefotaxime faster (at a relative hydrolysis rate of 30% compared with that of benzylpenicillin) than either ceftazidime or aztreonam (relative hydrolysis rates of 13 and 3.3%, respectively). Nucleotide sequencing of the gene encoding the pI 7.6 beta-lactamase from strain MCQ-3 revealed a blaSHV-type gene differing from the gene encoding SHV-1 at four nucleotides which resulted in amino acid substitutions: phenylalanine for isoleucine at position 8, serine for arginine at position 43, serine for glycine at position 238, and lysine for glutamate at position 240. This novel SHV-type extended-spectrum beta-lactamase is designated SHV-7.