This study identifies a natural system in Lactococcus lactis, in which a restriction modification specificity subunit resident on a 6159 bp plasmid (pAH33) alters the specificity of a functional R/M mechanism encoded by a 20.3 kb plasmid, pAH82. The new specificity was identified after phenotypic and molecular analysis of a 26.5 kb co-integrate plasmid (pAH90), which was detected after bacteriophage challenge of the parent strain. Analysis of the regions involved in the co-integration revealed that two novel hybrid hsdS genes had been formed during the co-integration event. The HsdS chimeras had interchanged the C- and N-terminal variable domains of the parent subunits, generating two new restriction specificities. Comparison of the parent hsdS genes with other type I specificity determinants revealed that the region of the hsdS genes responsible for the co-integration event is highly conserved among lactococcal type I hsdS determinants. Thus, as hsdS determinants are widespread in the genus Lactococcus, new restriction specificities may evolve rapidly after homologous recombination between these genes. This study demonstrates that, similar to previous observations in Gram-negative bacteria, a Gram-positive bacterium can acquire novel restriction specificities naturally through domain shuffling of resident HsdS subunits.