PI-SceI, a double-stranded DNA endonuclease from Saccharomyces cerevisiae, is generated by protein splicing of an intein, which is an internal polypeptide within a larger precursor protein. The enzyme initiates the mobility of the intein by cleaving at inteinless alleles of the VMA1 gene. Genetic and biochemical studies reveal that the enzyme makes numerous base-specific and phosphate backbone contacts with its 31 bp asymmetrical recognition site. This site can be divided into two regions, both of which contain nucleotides that are essential for cleavage by PI-SceI. Region I contains the PI-SceI cleavage site while Region II includes an adjacent sequence that covers two helical turns. Mutational, interference and DNA mobility shift analyses demonstrate that Region II is sufficient for high-affinity PI-SceI binding. Within this region, PI-SceI uses primarily phosphate backbone and some major groove interactions to contact the DNA, while within Region I, protein binding involves predominantly major groove interactions that overlap and lie proximal to the cleavage site. Interestingly, DNA binding by PI-SceI induces DNA conformational changes within Region II that are entirely exclusive of Region I sequences. Furthermore, additional distortion occurs when PI-SceI binds to Region I in conjunction with Region II. The importance of this latter distortion in the cleavage pathway is underscored by substrate mutations at or near the cleavage site that reduce or eliminate both Region I DNA bending and substrate cleavage. Based on these findings, we propose a model in which sequence-specific contacts made by PI-SceI contribute to its localization to the cleavage site and to its stabilization of a DNA conformation that is required for catalysis. Finally, we discuss how the recognition characteristics of PI-SceI may have allowed the evolution of other endonucleases with altered, but similar, specificities.