Group I intron-encoded endonucleases represent a new class of double strand cutting endonucleases whose function is to initiate the homing of introns by generating double strand breaks in site-specific sequences. We have studied the mechanism of interaction of the I-SceI endonuclease with different DNA substrates derived from its natural site in the intron-less gene or from intron-exon junctions in the gene with an intron. We show that the enzyme recognizes its asymmetrical site with high affinity binding to the sequence corresponding to the downstream exon followed by binding to the upstream exon and catalysis of phosphodiester bond hydrolysis. Asymmetrical nicking activity is observed as an intermediate of the cleavage reaction. In the intron-containing gene, the enzyme recognizes the downstream intron-exon junction without any cleavage activity. This binding raises the possibility of a specific function of homing endonucleases in either gene expression or intron homing steps subsequent to DNA cleavage.