Group II intron RNAs fold into catalytically active structures that catalyze their own self-splicing and subsequent transposition into DNA. Because of their remarkable enzymatic properties, it has been of interest to find new group II introns with novel properties. Here we report the cloning, sequencing, and mechanistic characterization of a new group II intron from the bacterium Azotobacter vinelandii (the AV intron). Although it bears the characteristics of the group IIB1 class, the AV intron is unusually G-C rich, and it has unusual insertion sequences and a minimal dependence on the EBS2-IBS2 tertiary interaction. The AV intron is the first bacterial intron that has been found to reside in a housekeeping gene which, in this case, encodes a heat-shock protein (hsp60). Consistent with a potential role in heat-shock regulation, kinetic analysis reveals that AV intron self-splicing is activated only at elevated temperatures. This suggests a novel pathway for the regulation of heat shock in prokaryotes and provides a first example of a thermally tolerant group II intron RNA.