L1Tc is a non-LTR LINE element from Trypanosoma cruzi that encodes its transposition machinery and bears an internal promoter. Herewith, we report the identification of an in vitro active hepatitis delta virus-like ribozyme located in the first 77 nt at the 5'-end of the L1Tc mRNA (L1TcRz). The data presented show that L1TcRz has a co-transcriptional function. Using gel-purified uncleaved RNA transcripts, the data presented indicate that the kinetics of the self-cleaving, in a magnesium-dependent reaction, fits to a two-phase decay curve. The cleavage point identified by primer extension takes place at +1 position of the element. The hydroxyl nature of the 5'-end of the 3'-fragment generated by the cleavage activity of L1TcRz was confirmed. Since we have previously described that the 77-nt long fragment located at the 5'-end of L1Tc has promoter activity, the existence of a ribozyme in L1Tc makes this element to be the first described non-LTR retroelement that has an internal promoter-ribozyme dual function. The L1Tc nucleotides located downstream of the ribozyme catalytic motif appear to inhibit its activity. This inhibition may be influenced by the existence of a specific L1Tc RNA conformation that is recognized by RNase P.