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Homing endonucleases, also known as meganucleases, are sequence-specific enzymes with large DNA recognition sites. These enzymes can be used to induce efficient homologous gene targeting in cells and plants, opening perspectives for genome engineering with applications in a wide series of fields, ranging from biotechnology to gene therapy. Here, we report the crystal structures at 2.0 and 2.1 A resolution of the I-DmoI meganuclease in complex with its substrate DNA before and after cleavage, providing snapshots of the catalytic process. Our study suggests that I-DmoI requires only 2 cations instead of 3 for DNA cleavage. The structure sheds light onto the basis of DNA binding, indicating key residues responsible for nonpalindromic target DNA recognition. In silico and in vivo analysis of the I-DmoI DNA cleavage specificity suggests that despite the relatively few protein-base contacts, I-DmoI is highly specific when compared with other meganucleases. Our data open the door toward the generation of custom endonucleases for targeted genome engineering using the monomeric I-DmoI scaffold.