Type II restriction endonucleases (REs) are widely used tools in molecular biology, biotechnology and diagnostics. Efforts to generate new specificities by structure-guided design and random mutagenesis have been unsuccessful so far. We have developed a new procedure called the methylation activity-based selection (MABS) for generating REs with a new specificity. MABS uses a unique property of bifunctional type II REs to methylate DNA targets they recognize. The procedure includes three steps: (1) conversion of a bifunctional RE into a monofunctional DNA-modifying enzyme by cleavage center disruption; (2) mutagenesis and selection of mutants with altered DNA modification specificity based on their ability to protect predetermined DNA targets; (3) reconstitution of the cleavage center's wild-type structure. The efficiency of the MABS technique was demonstrated by altering the sequence specificity of the bifunctional RE Eco57I from 5'-CTGAAG to 5'-CTGRAG, and thus generating the mutant restriction endonuclease (and DNA methyltransferase) of a specificity not known before. This study provides evidence that MABS is a promising technique for generation of REs with new specificities.