Interactions between distant DNA segments play important roles in various biological processes, such as DNA recombination. Certain restriction enzymes create DNA loops when two sites are held together and then cleave the DNA. DNA looping is important during DNA synapsis. Here we investigated the mechanisms of DNA looping by restriction enzyme SfiI by measuring the properties of the system at various temperatures. Different sized loop complexes, mediated by SfiI–DNA interactions, were visualized with AFM. The experimental results revealed that small loops are more favorable compared to other loop sizes at all temperatures. Our theoretical model found that entropic cost dominates at all conditions, which explains the preference for short loops. Furthermore, specific loop sizes were predicted as favorable from an energetic point of view. These predictions were tested by experiments with transiently assembled SfiI loops on a substrate with a single SfiI site.