β-Lactamases threaten the clinical use of carbapenems, which are considered antibiotics of last resort. The classical mechanism of serine carbapenemase catalysis proceeds through hydrolysis of an acyl-enzyme intermediate. We show that class D β-lactamases also degrade clinically used 1β-methyl-substituted carbapenems through the unprecedented formation of a carbapenem-derived β-lactone. β-Lactone formation results from nucleophilic attack of the carbapenem hydroxyethyl side chain on the ester carbonyl of the acyl-enzyme intermediate. The carbapenem-derived lactone products inhibit both serine β-lactamases (particularly class D) and metallo-β-lactamases. These results define a new mechanism for the class D carbapenemases, in which a hydrolytic water molecule is not required.