BcgI and BcgI-like restriction endonucleases have a very distinct characteristic which causes them to differ from the other classified restriction enzymes; they all cleave double-stranded DNA specifically on both sides of the recognition sequence to excise a short DNA fragment including the recognition sites. Here we report a new BcgI-like restriction endonuclease, BaeI, isolated from Bacillus sphaericus. Like BcgI, BaeI also cleaves double-stranded DNA on both strands upstream and downstream of its recognition sequence (10/15)ACNNNNGTAYC(12/7). There are two dominant polypeptides in the final preparation of BaeI with molecular masses of approximately 80 and 55 kDa. Both are slightly larger than the two BcgI subunits. BaeI requires both Mg2+ and AdoMet to cleave DNA. Accompanying bilateral cleavage activity, the heteromeric BaeI also has an N6-adenine methyltransferase activity which modifies the symmetrically located adenines within its recognition sequence.