Nascent transcripts are the true substrates for many splicing events in mammalian cells. In this review we discuss transcription, splicing, and alternative splicing in the context of co-transcriptional processing of pre-mRNA. The realization that splicing occurs co-transcriptionally requires two important considerations: First, the cis-acting elements in the splicing substrate are synthesized at different times in a 5' to 3' direction. This dynamic view of the substrate implies that in a 100 kb intron the 5' splice site will be synthesized as much as an hour before the 3' splice site. Second, the transcription machinery and the splicing machinery, which are both complex and very large, are working in close proximity to each other. It is therefore likely that these two macromolecular machines interact, and recent data supporting this notion is discussed. We propose a model for co-transcriptional pre-mRNA processing that incorporates the concepts of splice site-tethering and dynamic exon definition. Also, we present a dynamic view of the alternative splicing of FGF-R2 and suggest that this view could be generally applicable to many regulated splicing events.