The structure of the LAGLIDADG intron-encoded homing endonuclease I-CreI bound to homing site DNA has been determined. The interface is formed by an extended, concave beta sheet from each enzyme monomer that contacts each DNA half-site, resulting in direct side-chain contacts to 18 of the 24 base pairs across the full-length homing site. The structure indicates that I-CreI is optimized to its role in genetic transposition by exhibiting long site-recognition while being able to cleave many closely related target sequences. DNA cleavage is mediated by a compact pair of active sites in the I-CreI homodimer, each of which contains a separate bound divalent cation.