EcoRI inspects length of DNA and recognises specific palindromic nucleotide sequences. It then binds with DNA and cuts each of the two strands of double helix at specific points.
Mechanism of Action of Endonucleases

Steps in formation of recombinant DNA by action of restriction endonuclease enzyme EcoRI
▪ Every endonuclease inspects the entire DNA sequence for the palindromic recognition sequence.
▪ On finding the palindrome, the endonuclease binds to the DNA.
▪ It cuts the opposite strands of DNA in the sugar–phosphate backbone; a little away from the centre of the palindrome sites but between the same bases on both strands.
▪ This results in the formation of single stranded overhanging stretches at the end of each strand called sticky ends.
▪ The sticky ends facilitate the action of the enzyme DNA ligase by readily forming hydrogen bonds with complementary strands.
▪ In genetic engineering, DNA from different sources are cut with the same restriction enzymes so that both DNA fragments have same kind of sticky ends.
▪ These sticky ends are complementary to each other and thus can be joined by DNA ligase (end-to-end).
The first endonuclease discovered was HindII.