DNA cytosine-5 methyltransferases (C5-MTases) are valuable models to study sequence-specific modification of DNA and are becoming increasingly important tools for biotechnology. Here we describe a structure-guided rational protein design combined with random mutagenesis and selection to change the specificity of the HhaI C5-MTase from GCGC to GCG. The specificity change was brought about by a five-residue deletion and introduction of two arginine residues within and nearby one of the target recognizing loops. DNA protection assays, bisulfite sequencing and enzyme kinetics showed that the best selected variant is comparable to wild-type M.HhaI in terms of sequence fidelity and methylation efficiency, and supersedes the parent enzyme in transalkylation of DNA using synthetic cofactor analogs. The designed C5-MTase can be used to produce hemimethylated CpG sites in DNA, which are valuable substrates for studies of mammalian maintenance MTases.