A new category of self-splicing group I introns with conserved structural organization and function is found among the eukaryotic microorganisms Didymium and Naegleria. These complex rDNA introns contain two distinct ribozymes with different functions: a regular group I splicing-ribozyme and a small internal group I-like ribozyme (GIR1), probably involved in protein expression. GIR1 was found to cleave at two internal sites in an obligate sequential order. Both sites are located 3′ of the catalytic core. GIR1-catalyzed transesterification reactions could not be detected. We have compared all available GIR1 sequences and propose a common RNA secondary structure resembling that of group I splicing-ribozymes, but with some important differences. The GIR1s lack most peripheral sequence components, as well as a P1 segment, and, at approximately 160–190 nt, they are the smallest functional group I ribozymes known from nature. All GIR1s were found to contain a novel 6-bp pseudoknot (P15) within their catalytic core region. Experimental support of the proposed structure was obtained from the Didymium GIR1 by RNA structure probing and site-directed mutagenesis. Three-dimensional modeling indicates a compactly folded ribozyme with the functionally essential P15 exposed in the cleft between the two principal domains P3–P8 and P4–P6.