In the macronuclear rRNA genes of Tetrahymena thermophila, a 413 bp intervening sequence (IVS) interrupts the 26S rRNA-coding region. A restriction fragment of the rDNA containing the IVS and portions of the adjacent rRNA sequences (exons) was inserted downstream from the lac UV5 promoter in a recombinant plasmid. Transcription of this template by purified Escherichia coli RNA polymerase in vitro produced a shortened version of the pre-rRNA, which was then deproteinized. When incubated with monovalent and divalent cations and a guanosine factor, this RNA underwent splicing. The reactions that were characterized included the precise excision of the IVS, attachment of guanosine to the 5' end of the IVS, covalent cyclization of the IVS and ligation of the exons. We conclude that splicing activity is intrinsic to the structure of the RNA, and that enzymes, small nuclear RNAs and folding of the pre-rRNA into an RNP are unnecessary for these reactions. We propose that the IVS portion of the RNA has several enzyme-like properties that enable it to break and reform phosphodiester bonds. The finding of autocatalytic rearrangements of RNA molecules has implications for the mechanism and the evolution of other reactions that involve RNA.