EcoR124 and EcoR124/3 are type I DNA restriction and modification systems. The EcoR124/3 system arose from the EcoR124 system some 15 years ago and at the electron microscopic DNA heteroduplex level the genes for both systems are still apparently identical. We have shown that the DNA sequences recognized by the two systems are GAA(N6)RTCG for EcoR124 and GAA(N7)RTCG for EcoR124/3. The sequences thus differ only in the length of the non-specific spacer. This difference nevertheless places the two specific domains of the EcoR124/3 recognition sequence 0.34 nm further apart and rotates them 36 degrees with respect to those of EcoR124, which implies major structural differences in the proteins recognizing these sequences. We have now determined the nucleotide sequences of the hsdS and hsdM genes of both systems and of the hsdR gene of EcoR124/3. The hsdS gene products provide DNA sequence specificity in both restriction and modification, the hsdM gene products are necessary for modification and all three hsd gene products are required for restriction. The only difference that we have detected between the two systems is that a 12 base-pair sequence towards the middle of the hsdS gene is repeated twice in the EcoR124 gene and three times in the EcoR124/3 gene. We have deleted one of the repeats in the EcoR124/3 gene and shown that this changes the specificity to that of EcoR124. Thus, the extra four amino acids in the middle of the EcoR124/3 hsdS gene product, which in an alpha-helical configuration would extend 0.6 nm, are sufficient to explain the differences in sequence recognition. We suggest that the EcoR124/3 system was generated by an unequal crossing over and argue that this kind of specificity change should not be rare in Nature.