PspGI is a representative of a group of restriction endonucleases that recognize a pentameric sequence related to CCNGG. Unlike the previously investigated Ecl18kI, which does not have any specificity for the central base pair, PspGI prefers A/T over G/C in its target site. Here, we present a structure of PspGI with target DNA at 1.7 A resolution. In this structure, the bases at the center of the recognition sequence are extruded from the DNA and flipped into pockets of PspGI. The flipped thymine is in the usual anti conformation, but the flipped adenine takes the normally unfavorable syn conformation. The results of this and the accompanying manuscript attribute the preference for A/T pairs over G/C pairs in the flipping position to the intrinsically lower penalty for flipping A/T pairs and to selection of the PspGI pockets against guanine and cytosine. Our data show that flipping can contribute to the discrimination between normal bases. This adds a new role to base flipping in addition to its well-known function in base modification and DNA damage repair.