The last step of tRNA splicing in the yeast Saccharomyces cerevisiae is catalyzed by an NAD-dependent 2 -phosphotransferase, which transfers the splice junction 2 -phosphate from ligated tRNA to NAD to produce ADPribose 1؆-2؆ cyclic phosphate. We have purified the phosphotransferase about 28,000-fold from yeast extracts and cloned its structural gene by reverse genetics. tRNA splicing is essential in both the yeast Saccharomyces cerevisiae and humans, since both organisms contain tRNA gene families whose members all contain intervening sequences. Yeast has 10 such intron-containing tRNA gene families (of the approximately 45 total tRNA gene families) (see Ref. 1 for review), and humans have at least one intron-containing tRNA gene family (2). Since all known eukaryotic nuclear-encoded tRNA Tyr genes contain introns, it is likely that tRNA splicing is essential in all eukaryotes for processing of tRNA genes.tRNA introns are invariably located 1 base 3Ј of the anticodon, and this location is critical for the the first step of splicing. In both Xenopus and yeast the endonuclease binds the mature domain of the precursor tRNA, measures the length of the anticodon stem to locate the intron (3, 4), and excises it if the structure at the 3Ј splice site is correct (5, 6). The products of the reaction are exons bearing 2Ј-3Ј cyclic phosphates and 5Ј-hydroxyl groups at their ends, as shown in Fig. 1 (7, 8).Joining of the exons involves a ligase that generates a mature sized tRNA bearing a splice junction 2Ј-phosphate (9). The ligase from yeast catalyzes four distinct chemical steps to effect ligation: the 2Ј-3Ј cyclic phosphate at the end of the 5Ј exon is opened to a 2Ј-phosphate by a cyclic phosphodiesterase activity; the 5Ј-OH at the beginning of the 3Ј exon is phosphorylated by a polynucleotide kinase activity in the presence of GTP; the 5Ј-phosphate is activated by adenylylation from ATP; and then ligation occurs with loss of the adenylate moiety (9 -11). The result of ligation is a mature sized tRNA bearing a splice junction 2Ј-phosphate (see Fig. 1). A ligase present in wheat germ (12, 13), Chlamydomonas (14), and humans (15) also generates splice junctions with a 2Ј-phosphate, and the wheat germ protein is very similar in catalytic activities to the yeast enzyme (16,17). Since removal of the 2Ј-terminal phosphate prevents the yeast ligase from working in vitro (10, 18), the 2Ј-phosphate is likely formed at the splice junction when this ligase acts in vivo. The yeast ligase is known to be responsible for tRNA splicing in yeast, since conditional ligase mutants accumulate unligated tRNA exons under nonpermissive conditions (19). However, a second ligase, which uses a completely different chemical reaction and does not generate a splice junction 2Ј-phosphate, has been implicated in tRNA splicing in humans in vitro (20,21) and in Xenopus oocytes in vivo (22).Removal of the splice junction 2Ј-phosphate occurs by a highly unusual reaction: a 2Ј-phosphotransferase transfers the splice junction phosphate to NAD, forming th...