Group II intron homing occurs primarily by a mechanism in which the intron RNA reverse splices into a DNA target site and is then reverse transcribed by the intron-encoded protein. The DNA target site is recognized by an RNP complex containing the intron-encoded protein and the excised intron RNA. Here, we analyzed DNA target-site requirements for the Lactococcus lactis Ll.LtrB group II intron in vitro and in vivo. Our results suggest a model similar to yeast mtDNA introns, in which the intron-encoded protein first recognizes a small number of nucleotide residues in double-stranded DNA and causes DNA unwinding, enabling the intron RNA to base-pair with the DNA for reverse splicing. Antisense-strand cleavage requires additional interactions between the protein and 3' exon. Key nucleotide residues are recognized directly by the intron-encoded protein independent of sequence context, and there is a stringent requirement for fixed spacing between target site elements recognized by the protein and RNA components of the endonuclease. Experiments with DNA substrates containing GC-clamps or "bubbles" indicate a requirement for DNA unwinding in the 3' exon but not the distal 5' exon region. Finally, by applying the target-site recognition rules, we show that the L1.LtrB intron can be modified to insert at new sites in a plasmid-borne thyA gene in Escherichia coli. This strategy should be generally applicable to retargeting group II introns and to delivering foreign sequences to specific sites in heterologous genomes.