A novel and only recently recognized class of enzymes is composed of the site-specific endonucleases encoded by some group I introns. We have characterized several aspects of I-Ppo, the endonuclease that mediates the mobility of intron 3 in the ribosomal DNA of Physarum polycephalum. This intron is unique among mobile group I introns in that it is located in nuclear DNA. We found that I-Ppo is encoded by an open reading frame in the 5' half of intron 3, upstream of the sequences required for self-splicing of group I introns. Either of two AUG initiation codons could start this reading frame, one near the beginning of the intron and the other in the upstream exon, leading to predicted polypeptides of 138 and 160 amino acid residues. The longer polypeptide was the major form translated in vitro in a reticulocyte extract. From nuclease assays of proteins synthesized in vitro with partially deleted DNAs, we conclude that both polypeptides possess endonuclease activity. We also have expressed I-Ppo in Escherichia coli, using a bacteriophage T7 RNA polymerase expression system. The longer polypeptide also was the predominant form made in this system. It showed enzymatic activity in bacteria in vivo, as demonstrated by the cleavage of a plasmid carrying the target site. Like several other intron-encoded endonucleases, I-Ppo makes a four-base staggered cut in its ribosomal DNA target sequence, very near the site where intron 3 becomes integrated in crosses of intron 3-containing and intron 3-lacking Physarum strains.Group I introns are defined by the presence of conserved sequences and structural elements (reviewed in reference 2). Many group I introns can undergo autocatalytic splicing (self-splicing) in vitro, as first described for the prototypic intron of Tetrahymena cells (5). Of the more than 60 group I introns that have been identified to date (4), most are present in the DNA of mitochondria or chloroplasts or in the DNA of T-even bacteriophage. In only three organisms have group I introns been observed in nuclear genes, and in each of these they are located in the DNA coding for ribosomal RNA (rDNA). Pneumocystis carinii contains an intron in the rDNA encoding the small-subunit rRNA (18), but neither it nor the rDNA of this organism has been extensively characterized. Several but not all Tetrahymena species and strains contain the well-known self-splicing intron in extrachromosomal rDNA coding for the large-subunit rRNA (22,23,38). Depending on the strain, Physarum polycephalum contains two or three group I introns in the extrachromosomal rDNA coding for the large-subunit rRNA (28,30,31). Some group I introns have been found to be mobile elements. They rapidly and efficiently spread in vivo from a locus that contains the intron (I+) to the same locus in a homologous gene that lacks the intron (I). This process, which has been termed intron homing (15,16), is initiated by a double-strand break in the I-locus that is introduced by a site-specific endonuclease encoded by the intron itself. The actual homing of the ...