Insertion of an aspartate residue at position 345a in penicillin-binding protein 2 (PBP 2), which lowers the rate of penicillin acylation by ~6-fold, is commonly observed in penicillin-resistant strains of Neisseria gonorrhoeae. Here, we show that insertions of other amino acids also lower the penicillin acylation rate of PBP 2, but none supported growth of N. gonorrhoeae, indicating loss of essential transpeptidase activity. The Asp345a mutation likely acts by altering the interaction between its adjacent residue, Asp346, in the β2a-β2d hairpin loop and Ser363, the middle residue of the SXN active site motif. Because the adjacent aspartate creates ambiguity in the position of the insertion, we also examined if insertions at position 346a could confer decreased susceptibility to penicillin. However, only aspartate insertions were identified, indicating that only an Asp-Asp couple can confer resistance and retain transpeptidase function. The importance of the Asp346-Ser363 interaction was assessed by mutation of each residue to Ala. Although both mutants lowered the acylation rate of penicillin G by 5-fold, neither could support growth of N. gonorrhoeae, again indicating loss of transpeptidase function. Interaction between a residue in the equivalent of the β2a-β2d hairpin loop and the middle residue of the SXN motif is observed in crystal structures of other Class B PBPs, and its importance is also supported by multisequence alignments. Overall, these results suggest that this conserved interaction can be manipulated (e.g., by insertion) to lower the acylation rate by β-lactam antibiotics and increase resistance, but only if essential transpeptidase activity is preserved.