We have developed a complementation assay which allows us to distinguish between mutations affecting subunit assembly and mutations affecting DNA binding in the DNA recognition subunit (HsdS) of the multimeric restriction endonuclease EcoR1241. A number of random point mutations were constructed to test the validity of this assay. Two of the mutants produced were found to be truncated polypeptides that were still capable of complementation with the EcoR1241 Hsd subunits to give an active restriction enzyme of novel DNA specificity. The N-terminal variable domain (responsible for recognition of GAA from the EcoR1241 recognition sequence GAAnnnnnnRTCG) and the spacer region (central conserved region) is intact in both of these mutants. One of these mutant genes (hsdS(delta 50) has been cloned as an active Mtase. Purification of the Mtase proved to be difficult because the complex is weak. However, Mtase activity was obtained from a soluble cell extract, and this allowed us to determine the DNA recognition sequence of the Mtase to be GAAnnnnnnnTTC. This recognition sequence is an inverted repeat of 5'-end of the EcoR1241 recognition sequence. This suggests that the mutant Mtase is assembled from two inverted HsdS(D50) subunits, possibly held together by the HsdM subunits.