The mitochondrial DNA molecules of two interfertile algal species, Chlamydomonas smithii and C. reinhardtii, are co-linear except for a 1075 bp intron (the alpha-insert) that is present in the cob gene of C. smithii. The alpha-insert, a group I intron (Cs cob.1) containing an open reading frame (ORF) which encodes a basic, hydrophilic protein of 237 amino acids, is unidirectionally transmitted to all diploid progeny during interspecific crosses. In this report, we show that the Cs cob.1-encoded protein is a site-specific endonuclease (I-Csm I) which could mediate the intron transfer via the gene conversion mechanism. The Cs cob.1 ORF was cloned into the vector pMALcr1 and over-expressed as a hybrid protein fused to maltose-binding protein (MBP). This fusion protein exhibited an in vivo endonuclease activity which specifically cleaved the intron homing site within the intronless cob gene.