The non-long-terminal-repeat (non-LTR) retrotransposons (also called long interspersed repetitive elements [LINEs]) are among the oldest retroelements. Here we describe the properties of such an element from a primitive protozoan parasite, Entamoeba histolytica, that infects the human gut. This 4.8-kb element, called EhLINE1, is present in about 140 copies dispersed throughout the genome. The element belongs to the R4 clade of non-LTR elements. It has a centrally located reverse transcriptase domain and a restriction enzyme-like endonuclease (EN) domain at the carboxy terminus. We have cloned and expressed a 794-bp fragment containing the EN domain in Escherichia coli. The purified protein could nick supercoiled pBluescript DNA to yield open circular and linear DNAs. The conserved PDX12-14D motif was required for activity. Genomic sequences flanking the sites of insertion of EhLINE1 and the putative partner short interspersed repetitive element (SINE), EhSINE1, were analyzed. Both elements resulted in short target site duplications (TSD) upon insertion. A common feature was the presence of a short T-rich stretch just upstream of the TSD in most insertion sites. By sequence analysis an empty target site in the E. histolytica genome, known to be occupied by EhSINE1, was identified. When a 176-bp fragment containing the empty site was used as a substrate for EN, it was prominently nicked on the bottom strand at the precise point of insertion of EhSINE1, showing that this SINE could use the LINE-encoded endonuclease for its insertion. The nick on the bottom strand was toward the right of the TSD, which is uncommon. The lack of strict target site-specificity of the restriction enzyme-like EN encoded by EhLINE1 is also exceptional. A model for retrotransposition of EhLINE1/SINE1 is presented.