Structural Biochemistry/Enzyme Catalytic Mechanism/Restriction Enzyme

Overview
Restriction enzymes are DNA-cutting enzymes found in bacteria (and harvested from them for use). Because they cut within the molecule, they are often called restriction endonucleases.

In order to be able to sequence DNA, it is first necessary to cut it into smaller fragments. Many DNA-digesting enzymes (like those in your pancreatic fluid) can do this, but most of them are no use for sequence work because they cut each molecule randomly. This produces a heterogeneous collection of fragments of varying sizes. What is needed is a way to cleave the DNA molecule at a few precisely-located sites so that a small set of homogeneous fragments are produced. The tools for this are the restriction endonucleases. The rarer the site it recognizes, the smaller the number of pieces produced by a given restriction endonuclease.

Reference
http://users.rcn.com/jkimball.ma.ultranet/BiologyPages/R/RestrictionEnzymes.html