Mycoplasma bacteriophage L51 single-stranded DNA and L2 double-stranded DNA are host cell modified and restricted when they transfect Acholeplasma laidlawii JA1 and K2 cells. The L51 genome has a single restriction endonuclease MboI site (recognition sequence GATC), which contains 5-methylcytosine when the DNA is isolated from L51 phage grown in K2 cells but is unmethylated when the DNA is from phage grown in JA1 cells. This GATC sequence is nonessential, since an L51 mutant in which the MboI site was deleted was still viable. DNA from this deletion mutant phage was not restricted during transfection of either strain K2 or JA1. Therefore, strain K2 restricts DNA containing the sequence GATC, and strain JA1 restricts DNA containing the sequence GAT 5-methylcytosine. We conclude that K2 cells have a restriction system specific for DNA containing the sequence GATC and protect their DNA by methylating cytosine in this sequence. In contrast, JA1 cells (which contain no methylated DNA bases) have a newly discovered type of restriction-modification system. From results of studies of the restriction of specifically methylated DNAs, we conclude that JA1 cells restrict DNA containing 5-methylcytosine, regardless of the nucleotide sequence containing 5-methylcytosine. This is the first report of a DNA restriction activity specific for a single (methylated) base. Modification in this system is the absence of cytosine methylating activity. A restriction-deficient variant of strain JA1, which retains the JA1 modification phenotype, was isolated, indicating that JA1 cells have a gene product with restriction specificity for DNA containing 5-methylcytosine.