The BcgI restriction-modification system consists of two subunits, A and B. It is a bifunctional protein complex which can cleave or methylate DNA. The regulation of these competing activities is determined by the DNA substrates and cofactors. BcgI is an active endonuclease and a poor methyltransferase on unmodified DNA substrates. In contrast, BcgI is an active methyltransferase and an inactive endonuclease on hemimethylated DNA substrates. The cleavage and methylation reactions share cofactors. While BcgI requires Mg2+and S -adenosyl methionine (AdoMet) for DNA cleavage, its methylation reaction requires only AdoMet and yet is significantly stimulated by Mg2+. Site-directed mutagenesis was carried out to investigate the relationship between AdoMet binding and BcgI DNA cleavage/methylation activities. Most substitutions of conserved residues forming the AdoMet binding pocket in the A subunit abolished both methylation and cleavage activities, indicating that AdoMet binding is an early common step required for both cleavage and methylation. However, one mutation (Y439A) abolished only the methylation activity, not the DNA cleavage activity. This mutant protein was purified and its methylation, cleavage and AdoMet binding activities were tested in vitro . BcgI-Y439A had no detectable methylation activity, but it retained 40% of the AdoMet binding and DNA cleavage activities.