Objectives: To investigate the molecular epidemiology of Enterobacteriaceae producing extended-spectrum ß-lactamases (ESBLs) in London and South-East England. Methods: A prospective study involving 16 hospital microbiology laboratories in London and South-East England was undertaken over a 12 week period. Each laboratory submitted up to 100 consecutive cephalosporin-resistant Enterobacteriaceae isolates judged clinically significant by microbiology staff. Centralized testing was undertaken to confirm organism identification and cephalosporin resistance and to analyse resistance mechanisms. Results: The predominant mechanism of cephalosporin resistance in isolates from both hospital and community settings was the production of CTX-M-type ESBLs, with CTX-M-producing Escherichia coli as the most numerous resistant organism overall. Other major mechanisms of cephalosporin resistance included production of non-CTX-M ESBLs and AmpC ß-lactamases. Most ESBL (both CTX-M and non-CTX-M) producers were multiply resistant to non-ß-lactam antibiotics, including trimethoprim, ciprofloxacin and gentamicin. Conclusions: CTX-M enzymes, which were unrecorded in the UK prior to 2000, have become the major mechanism of cephalosporin resistance in Enterobacteriaceae in South-East England. E. coli has overtaken Klebsiella and Enterobacter spp. to become the major host for ESBLs. Due to the multiple antibiotic resistance exhibited by many ESBL-producers, these changes have major implications for antimicrobial therapy.