Hydrolytic deamination of cytosines in DNA creates uracil and, if unrepaired, these lesions result in C to T mutations. We have suggested previously that a possible way in which cells may prevent or reduce this chemical reaction is through the binding of proteins to DNA. We use a genetic reversion assay to show that a restriction enzyme, PspGI, protects cytosines within its cognate site, 5'-CCWGG (W is A or T), against deamination under conditions where no DNA cleavage can occur. It decreases the rate of cytosine deamination to uracil by 7-fold. However, the same protein dramatically increases the rate of deaminations within the site 5'-CCSGG (S is C or G) by approximately 15-fold. Furthermore, a similar increase in cytosine deaminations is also seen with a catalytically inactive mutant of the enzyme showing that endonucleolytic ability of the protein is dispensable for its mutagenic action. The sequences of the mutants generated in the presence of PspGI show that only one of the cytosines in CCSGG is predominantly converted to thymine. Our results are consistent with PspGI 'sensitizing' the cytosine in the central base pair in CCSGG for deamination. Remarkably, PspGI sensitizes this base for damage despite its inability to form stable complexes at CCSGG sites. These results can be explained if the enzyme has a transient interaction with this sequence during which it flips the central cytosine out of the helix. This prediction was validated by modeling the structure of PspGI-DNA complex based on the structure of the related enzyme Ecl18kI which is known to cause base-flipping.