Cajal (coiled) bodies are conserved subnuclear organelles that are present in the nucleoplasm of both animal and plant cells. Although Cajal bodies were first described nearly 100 years ago, their function has remained largely speculative. Here, we describe a novel class of human small nuclear RNAs that localize specifically to Cajal bodies. The small Cajal body-specific RNAs (scaRNAs) are predicted or have already been demonstrated to function as guide RNAs in site-specific synthesis of 2'-O-ribose-methylated nucleotides and pseudouridines in the RNA polymerase II-transcribed U1, U2, U4 and U5 spliceosomal small nuclear RNAs (snRNAs). Our results provide strong support for the idea that the Cajal body, this mysterious nuclear organelle, provides the cellular locale for post-transcriptional modification of spliceosomal snRNAs.