The type I DNA methyltransferase M.EcoR124I consists of two methylation subunits (HsdM) and one DNA recognition subunit (HsdS). When expressed independently, HsdS is insoluble, but this subunit can be obtained in soluble form as a GST fusion protein. We show that the HsdS subunit, even as a fusion protein, is unable to form a discrete complex with its DNA recognition sequence. When HsdM is added to the HsdS fusion protein, discrete complexes are formed but these are unable to methylate DNA. The two complexes formed correspond to species with one or two copies of the HsdM subunit, indicating that blocking the N-terminus of HsdS affects one of the HsdM binding sites. However, removal of the GST moiety from such complexes results in tight and specific DNA binding and restores full methylation activity. The results clearly demonstrate the importance of the HsdM subunit for DNA binding, in addition to its catalytic role in the methyltransferase reaction.