Looping and cleavage of single DNA molecules by the two-site restriction endonuclease Sau3AI were measured with optical tweezers. A DNA template containing many recognition sites was used, permitting loop sizes from approximately 10 to 10,000 basepairs. At high enzyme concentration, cleavage events were detected within 5 s and nearly all molecules were cleaved within 5 min. Activity decreased approximately 10-fold as the DNA tension was increased from 0.03 to 0.7 pN. Substituting Ca(2+) for Mg(2+) blocked cleavage, permitting measurement of stable loops. At low tension, the initial rates of cleavage and looping were similar (approximately 0.025 s(-1) at 0.1 pN), suggesting that looping is rate limiting. Short loops formed more rapidly than long loops. The optimum size decreased from approximately 250 to 45 basepairs and the average number of loops (in 1 min) from 4.2 to 0.75 as tension was increased from 0.03 to 0.7 pN. No looping was detected at 5 pN. These findings are in qualitative agreement with recent theoretical predictions considering only DNA mechanics, but we observed weaker suppression with tension and smaller loop sizes. Our results suggest that the span and elasticity of the protein complex, nesting of loops, and protein-induced DNA bending and wrapping play an important role.