We identified a Mg2+ dependent 5' exo-ribonuclease and an RNA ligase in cell-free extracts of Trypanosome brucei. The exo-ribonuclease in S100 or nuclear extracts, removes about 20 nts from the 5' end of SP6 derived capped as well as uncapped RNA and then stops. In contrast to the activity of the exo-ribonuclease on capped SP6 mini-exon transcripts, the exonuclease cannot degrade trypanosome-derived mini-exon transcripts or the mini-exon located at hsp 70 mRNAs. We therefore assume that the four secondary base modifications adjacent to the mini-exon cap, generated in vivo, confer resistance to the exo-ribonuclease. After exonuclease shortening of SP6 transcripts, an RNA ligase catalizes intramolecular ligation, generating a 3'-5' phosphodiester bond in a Mg2+ and ATP dependent reaction.