We have investigated the ATPase activity of the type IC restriction-modification (R-M) system EcoR124II. As with all type I R-M systems EcoR 124II requires ATP hydrolysis to cut DNA. We determined the KM for ATP to be 10(-5) to 10(-4) M. By measuring ATP hydrolysis under different conditions and by simultaneously monitoring DNA restriction, methylation and ATP hydrolysis we propose that the order of events during restriction is: (1) binding of EcoR124II to a non-methylated recognition sequence, (2) start of DNA-dependent ATP hydrolysis which continues even after restriction is complete, (3) restriction of DNA, (4) methylation of the product. Non-cleavable DNA substrates, such as recognition site containing oligonucleotides, also support ATP hydrolysis. Methylation can also occur prior to ATP hydrolysis and prevent DNA degradation.