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Generating diverse protein libraries that contain improved variants at a sufficiently high frequency is critical for improving the properties of proteins using directed evolution. Many studies have illustrated how random mutagenesis, cassette mutagenesis, DNA shuffling and similar approaches are effective diversity generating methods for directed evolution. Very few studies have explored random circular permutation, the intramolecular relocation of the N- and C-termini of a protein, as a diversity-generating step for directed evolution. We subjected a library of random circular permutations of TEM-1 β-lactamase to selections on increasing concentrations of a variety of β-lactam antibiotics including cefotaxime. We identified two circularly permuted variants that conferred elevated resistance to cefotaxime but decreased resistance to other antibiotics. These variants were circularly permuted in the Ω-loop proximal to the active site. Remarkably, one variant was circularly permuted such that the key catalytic residue Glu166 was located at the N-terminus of the mature protein.