The RecA intein of Mycobacterium tuberculosis, a novel double-stranded DNA endonuclease, requires both Mn2+ and ATP for efficient cleavage of the inteinless recA allele. In this study, we show that Mg2+ alone was sufficient to stimulate PI-MtuI to cleave double-stranded DNA at ectopic sites. In the absence of Mg2+, PI-MtuI formed complexes with topologically different forms of DNA containing ectopic recognition sequences with equal affinity but failed to cleave DNA. We observed that PI-MtuI was able to inflict double-strand breaks robustly within the ectopic recognition sequence to generate either a blunt end or 1-2 nucleotide 3'-hydroxyl overhangs. Mutational analyses of the presumptive metal-ion binding ligands (D122, D222 and E220) together with immunoprecipitation assays provided compelling evidence to link both the Mg2+- and Mn2+ and ATP-dependent endonuclease activities to PI-MtuI. The kinetic mechanism of PI-MtuI promoted cleavage of ectopic DNA sites proceeded through a sequential mechanism with transient accumulation of nicked circular duplex DNA as an intermediate. Together, these data suggest that PI-MtuI, like group II introns, might mediate ectopic DNA transposition and hence its lateral transfer in natural populations.