Homing endonuclease genes (HEGs) are mobile DNA elements that are thought to confer no benefit to their host. They encode site-specific DNA endonucleases that perpetuate the element within a species population by homing and disseminate it between species by horizontal transfer. Several yeast species contain the VMA1 HEG that encodes the intein-associated VMA1-derived endonuclease (VDE). The evolutionary state of VDEs from 12 species was assessed by assaying their endonuclease activities. Only two enzymes are active, PI-ZbaI from Zygosaccharomyces bailii and PI-ScaI from Saccharomyces cariocanus. PI-ZbaI cleaves the Z.bailii recognition sequence significantly faster than the Saccharomyces cerevisiae site, which differs at six nucleotide positions. A mutational analysis indicates that PI-ZbaI cleaves the S.cerevisiae substrate poorly due to the absence of a contact that is analogous to one made in PI-SceI between Gln-55 and nucleotides +9/+10. PI-ZbaI cleaves the Z.bailii substrate primarily due to a single base-pair substitution (A/T+5 --> T/A+5). Structural modeling of the PI-ZbaI/DNA complex suggests that Arg-331, which is absent in PI-SceI, contacts T/A+5, and the reduced activity observed in a PI-ZbaI R331A mutant provides evidence for this interaction. These data illustrate that homing endonucleases evolve altered specificity as they adapt to recognize alternative target sites.