Group I, group II and spliceosomal introns splice by two sequential transesterification reactions. For both spliceosomal and group II introns, the first-step reaction occurs by nucleophilic attack on the 5' splice junction by the 2' hydroxyl of an internal adenosine, forming a 2'-5' phosphodiester branch in the intron. The second reaction joins the two exons with a 3'-5' phosphodiester bond and releases intron lariat. In vitro, group II introns can self-splice by an efficient alternative pathway in which the first-step reaction occurs by hydrolysis. The resulting linear splicing intermediate participates in normal second-step reactions, forming spliced exon and linear intron RNAs. Here we show that the group II intron first-step hydrolysis reaction occurs in vivo in place of transesterification in the mitochondria of yeast strains containing branch-site mutations. As expected, the mutations block branching, but surprisingly still allow accurate splicing. This hydrolysis pathway may have been a step in the evolution of splicing mechanisms.