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Homing endonucleases confer mobility to their host intervening sequence, either an intron or intein, by catalyzing a highly specific double-strand break in a cognate allele lacking the intervening sequence. These proteins are characterized by their ability to bind long DNA target sites (14–40 bp) and their tolerance of minor sequence changes in these sites. A wealth of biochemical and structural data has been generated for these enzymes over the past few years. Herein we review our current understanding of homing endonucleases, including their diversity and evolution, DNA-binding and catalytic mechanisms, and attempts to engineer them to bind novel DNA substrates.