NaSSU1 is a complex nuclear group I intron found in several species of Naegleria, consisting of a large self-splicing group I ribozyme (NaGIR2), which itself is interrupted by a small, group I-like ribozyme (NaGIR1) and an open reading frame (ORF) coding for a homing endonuclease. The GIR1 ribozyme cleaves in vitro transcripts of NaSSU1 at two internal processing sites about 400 nt downstream of the 5′ end of the intron, proximal to the endonuclease ORF. Here we demonstrate that self-cleavage of the excised intron also occurs in vivo in Naegleria gruberi, generating an ORF-containing RNA that possesses a short leader with a sequence element likely to be involved in gene expression. To assess the functional significance of self-cleavage, we constructed a genetic system in Saccharomyces cerevisiae. First, a mutant yeast strain was selected with a mutation in all the rRNA genes, rendering the rDNA resistant to cleavage by the Naegleria endonuclease. Active endonuclease, which is otherwise lethal, could be expressed readily in these cells. Endonuclease activity also could be detected in extracts of yeast harboring plasmids in which the endonuclease ORF was embedded in its native context in the intron. Analysis of the RNA from these yeast cells showed that the excised intron RNA was processed as in N. gruberi. A mutant intron constructed to prevent self-cleavage of the RNA failed to express endonuclease activity. These results support the hypothesis that the NaGIR1-catalyzed self-cleavage of the intron RNA is a key event in expression of the endonuclease.