To cut DNA at their target sites, restriction enzymes assemble into different oligomeric structures. The Ecl18kI endonuclease in the crystal is arranged as a tetramer made of two dimers each bound to a DNA copy. However, free in solution Ecl18kI is a dimer. To find out whether the Ecl18kI dimer or tetramer represents the functionally important assembly, we generated mutants aimed at disrupting the putative dimer-dimer interface and analysed the functional properties of Ecl18kI and mutant variants. We show by atomic force microscopy that on two-site DNA, Ecl18kI loops out an intervening DNA fragment and forms a tetramer. Using the tethered particle motion technique, we demonstrate that in solution DNA looping is highly dynamic and involves a transient interaction between the two DNA-bound dimers. Furthermore, we show that Ecl18kI cleaves DNA in the synaptic complex much faster than when acting on a single recognition site. Contrary to Ecl18kI, the tetramerization interface mutant R174A binds DNA as a dimer, shows no DNA looping and is virtually inactive. We conclude that Ecl18kI follows the association model for the synaptic complex assembly in which it binds to the target site as a dimer and then associates into a transient tetrameric form to accomplish the cleavage reaction.