The optional group I intron of the mitochondrial 21S rRNA gene of Saccharomyces cerevisiae contains a 235-codon-long open reading frame the translation product of which (the omega transposase) catalyzes the formation of a double-strand break within the intron-minus (omega-) copies of the same gene. Purified omega transposase generates in vitro a 4-base-pair staggered cut with 3' hydroxyl overhangs at the exact position where the intron eventually inserts in the gene. Using randomly mutagenized synthetic oligonucleotides, single-base mutants were produced at 21 positions around the cleavage site. Experiments with these oligonucleotides show that the recognition site extends over an 18-base pair-long sequence within which minimal sequence degeneracy is tolerated. The intron-encoded omega transposase is, therefore, one of the most specific restriction endonucleases known to date.