Metnase (SETMAR) is a SET and transposase fusion protein that promotes in vivo 
end joining activity and mediates genomic integration of foreign DNA. Recent 
studies showed that Metnase retained most of the transposase activities, 
including 5'-terminal inverted repeat (TIR)-specific binding and assembly of a 
paired end complex, and cleavage of the 5'-end of the TIR element. Here we show 
that R432 within the helix-turn-helix motif is critical for sequence-specific 
recognition, as the R432A mutation abolishes its TIR-specific DNA binding 
activity. Metnase possesses a unique DNA nicking and/or endonuclease activity 
that mediates cleavage of duplex DNA in the absence of the TIR sequence. While 
the HTH motif is essential for the Metnase-TIR interaction, it is not required 
for its DNA cleavage activity. The DDE-like motif is crucial for its DNA 
cleavage action as a point mutation at this motif (D483A) abolished its DNA 
cleavage activity. Together, our results suggest that Metnase's DNA cleavage 
activity, unlike those of other eukaryotic transposases, is not coupled to its 
sequence-specific DNA binding.