PI-SceI, a homing endonuclease of the LAGLIDADG family, consists of two domains involved in DNA cleavage and protein splicing, respectively. Both domains cooperate in binding the recognition sequence. Comparison of the structures of PI-SceI in the absence and presence of substrate reveals major conformational changes in both the protein and DNA. Notably, in the protein-splicing domain the loop comprising residues 53-70 and adopts a "closed" conformation, thus enabling it to interact with the DNA. We have studied the dynamics of DNA binding and subsequent loop movement by fluorescence techniques. Six amino acids in loop53-70 were individually replaced by cysteine and modified by fluorescein. The interaction of the modified PI-SceI variants with the substrate, unlabeled or labeled with tetramethylrhodamine, was analyzed in equilibrium and stopped-flow experiments. A kinetic scheme was established describing the interaction between PI-SceI and DNA. It is noteworthy that the apparent hinge-flap motion of loop53-70 is only observed in the presence of a divalent metal ion cofactor. Substitution of the major Mg2+-binding ligands in PI-SceI, Asp-218 and Asp-326, by Asn or "nicking" PI-SceI with trypsin at Arg-277, which interferes with formation of an active enzyme.substrate complex, both prevent the conformational change of loop53-70. Deletion of the loop inactivates the enzyme. We conclude that loop53-70 is an important structural element that couples DNA recognition by the splicing domain with DNA cleavage by the catalytic domain and as such "communicates" with the Mg2+ binding sites at the catalytic centers.