Mutational analysis has previously indicated that D83 and E98 residues are essential for DNA cleavage activity and presumably chelate a Mg2+ ion at the active site of MunI restriction enzyme. In the absence of metal ions, protonation of an ionizable residue with a pKa > 7.0, most likely one of the active site carboxylates, controls the DNA binding specificity of MunI [Lagunavicius, A., Grazulis, S., Balciunaite, E., Vainius, D., and Siksnys, V. (1997) Biochemistry 36, 11093-11099.]. Thus, competition between H+ and Mg2+ binding at the active site of MunI presumably plays an important role in catalysis/binding. In the present study we have identified elementary steps and intermediates in the reaction pathway of plasmid DNA cleavage by MunI and elucidated the effect of pH and Mg2+ ions on the individual steps of the DNA cleavage reaction. The kinetic analysis indicated that the multiple-turnover rate of plasmid cleavage by MunI is limited by product release throughout the pH range 6.0-9.3. Quenched-flow experiments revealed that open circle DNA is an obligatory intermediate in the reaction pathway. Under optimal reaction conditions, open circle DNA remains bound to the MunI; however it is released into the solution at low [MgCl2]. Rate constants for the phoshodiester bond hydrolysis of the first (k1) and second (k2) strand of plasmid DNA at pH 7.0 and 10 mM MgCl2 more than 100-fold exceed the kcat value which is limited by product dissociation. The analysis of the pH and [Mg2+] dependences of k1 and k2 revealed that both H+ and Mg2+ ions compete for the binding to the same residue at the active site of MunI. Thus, the decreased rate of phosphodiester hydrolysis by MunI at pH < 7.0 may be due to the reduction of affinity for the Mg2+ binding at the active site. Kinetic analysis of DNA cleavage by MunI yielded estimates for the association-dissociation rate constants of enzyme-substrate complex and demonstrated the decreased stability of the MunI-DNA complex at pH values above 8.0.