The single group-I intron (ChLSU.1) in the chloroplast (cp) large subunit rRNA-encoding gene (rrnL) of the green alga Chlamydomonas humicola is located at a position at which no introns have previously been characterized in other systems. In the present study, the nucleotide (nt) sequence of this 1118-bp intron was found to contain an internal open reading frame (ORF) that potentially encodes a basic protein of 218 amino acid residues. The putative C. humicola protein features two copies of the LAGLI-DADG motif and is part of the family of intron-encoded proteins comprising the endonucleases (ENases), I-SceI, I-SceIV and I-CsmI. Expression of the ChLSU.1 intron ORF in vitro in the presence of a 260-bp DNA fragment containing the exon 1-2 junction of an intronless version of the C. humicola rrnL resulted in specific cleavage of the DNA fragment very close to the intron insertion site. This novel intron-encoded ENase, designated I-ChuI, was also shown to generate a staggered cut with 4-nt (CTCG) 3'-OH overhangs 2 bp downstream from the intron insertion site.