We have studied splicing of precursors to the large ribosomal RNA and processing of the excised intron in yeast mitochondria using primer extension with reverse transcriptase and electron microscopy. Structural features of the following intermediates are described: first, a linear RNA carrying a 5'-terminal G that is not encoded in mitochondrial DNA; second, a circular RNA in which the 3' and 5' intron borders are covalently linked. Three nucleotides of the 5' intron border are absent from the site of circle closure. The properties of these intermediates fit remarkably well into the mechanism of self-splicing described for the ribosomal precursor RNA from Tetrahymena nuclei. A new feature of the yeast mitochondrial system is that the excised intron can have one of two destinies, circularization or cleavage at an internal position.