Penicillin is an antibiotic produced by the Penicillium notatum mold. It was discovered in 1929 by Alexander Fleming, who first used it to control bacterial infection. American scientists Ernst Boris Chain and Howard Walter Florey, who created a method for mass producing the drug, shared the 1945 Nobel Prize in medicine with Fleming.
It has since become the most widely used antibiotic to date and is still used for many Gram-positive bacterial infections.
Penicllin works by inhibiting the formation of peptidoglycan cross links in the bacterial cell wall by directly competing for the reaction site (the beta-lactam ring of penicillin is a chemical analogue for the enzyme that links the peptidoglycan molecules in bacteria) and thus preventing the bacteria from multiplying (or rather causing cell lysis or death when the bacteria tries to divide). See optical isomerism.
Antibiotic resistance to penicillin is now common amongst many hospital acquired bacteria. The resistance to penicillin has been partly (maybe mostly) due to the rise of beta-lactamase producing bacteria which secrete an enzyme that breaks down the beta-lactam ring of penicillin, rendering it harmless to the bacteria.