Pseudomonas aeruginosa, a notorious pathogen, is responsible for severe human infections such as respiratory tract infections, soft tissue infections, and urinary tract infections. Beta-lactams are the cornerstone of treatment for these infections; however, the rise of beta-lactamase enzymes has steadily eroded their efficacy. Among these, Bel-1, a Class A extended-spectrum beta-lactamase (ESBL), stands out due to its unusual features resembling Class A carbapenemases, including a distinct Cys69-Cys238 disulfide bond. Despite this, Bel-1 primarily exhibits ESBL-like activity. To uncover its evolutionary trajectory towards carbapenemase activity, we conducted a detailed biochemical characterization of Bel-1 with various beta-lactam drugs. Interestingly, oxacillin inhibited Bel-1, consistent with its ESBL nature. Using isothermal titration calorimetry (ITC), we studied oxacillin binding and further explored substrate interactions by employing a deacylation-deficient mutant (E166A), enabling substrate-binding analysis without catalytic turnover. We crystallized the wild-type Bel-1 (PDB: 8JK3) and its E166A mutant (PDB: 8JOI), performing thermal melting and molecular dynamics simulations at various temperatures to examine the role of E166 in enzyme stability. These experiments revealed E166's crucial contribution to maintaining enzyme stability and its involvement in deacylation water positioning within the active site. While deacylation water was present in wild-type Bel-1, it was absent in the E166A mutant, underscoring E166's role in substrate processing. This study provides significant insights into Bel-1's behavior, delineating its distinctions from Class A carbapenemases and advancing our understanding of beta-lactamase evolution and function.