We have investigated host restriction as a barrier to transformation and developed a method for gene transfer into the previously untransformable, heterotrophic cyanobacterium Nostoc PCC 7121. A restriction endonuclease, designated Nsp 7121I, has been partially purified by phosphocellulose chromatography of Nostoc cell extracts. Comparisons of Nsp 7121I digests of bacteriophage lambda and plasmid DNAs with computer-generated restriction fragment profiles showed that Nsp 7121I is an isoschizomer of restriction endonucleases, such as Asu I, Nsp 7524IV, Sau 96I, and Eco 47II, that recognize the sequence GGNCC. Cleavage by Nsp 7121I within this sequence was confirmed by sequence analysis of DNA fragments cleaved at a unique Nsp 7121I site. These data further suggested that cleavage occurs after the first G (5'-G/GNCC-3') in this site to generate a three base 5' overhang. Nsp 7121I degraded all plasmids used in previous transformation attempts but modification of these DNA molecules by Eco 47II methylase effectively prevented digestion by Nsp 7121I. Plasmids premethylated by passage through Escherichia coli carrying a plasmid encoded Eco 47II methylase have now been used in an electroporation procedure to transform Nostoc PCC 7121 to neomycin resistance at frequencies as high as one transformant per 10(3) viable cells. Transformation, and stable replication within Nostoc of one of the transforming plasmids (pRL25), was confirmed by recovery of pRL25, in its original form, from transformants. Conjugal transfer of pRL25 from E. coli into Nostoc was also possible but at much lower efficiency than by electroporation. These findings establish the basis for genetic analysis of Nostoc PCC 7121, from which genes for photosynthetic electron transport have been cloned.