To cut DNA at their target sites, restriction enzymes assemble into different oligomeric structures. The Ecl18kI endonuclease in the crystal is arranged as a tetramer made of two dimers each bound to a DNA copy. However, free in solution Ecl18kI is a dimer. To find out whether the Ecl18kI dimer or tetramer represents the functionally important assembly, we generated mutants aimed at disrupting the putative dimer–dimer interface and analysed the functional properties of Ecl18kI and mutant variants. We show by atomic force microscopy that on two-site DNA, Ecl18kI loops out an intervening DNA fragment and forms a tetramer. Using the tethered particle motion technique, we demonstrate that in solution DNA looping is highly dynamic and involves a transient interaction between the two DNA-bound dimers. Furthermore, we show that Ecl18kI cleaves DNA in the synaptic complex much faster than when acting on a single recognition site. Contrary to Ecl18kI, the tetramerization interface mutant R174A binds DNA as a dimer, shows no DNA looping and is virtually inactive. We conclude that Ecl18kI follows the association model for the synaptic complex assembly in which it binds to the target site as a dimer and then associates into a transient tetrameric form to accomplish the cleavage reaction.