Group II introns are commonly believed to be the progenitors of spliceosomal introns, but they are notably absent from nuclear genomes. Barriers to group II intron function in nuclear genomes therefore beg examination. A previous study showed that nuclear expression of a group II intron in yeast results in nonsense-mediated decay and translational repression of mRNA, and that these roadblocks to expression are group II intron-specific. To determine the molecular basis for repression of gene expression, we investigated cellular dynamics of processed group II intron RNAs, from transcription to cellular localization. Our data show pre-mRNA mislocalization to the cytoplasm, where the RNAs are targeted to foci. Furthermore, tenacious mRNA-pre-mRNA interactions, based on intron-exon binding sequences, result in reduced abundance of spliced mRNAs. Nuclear retention of pre-mRNA prevents this interaction and relieves these expression blocks. In addition to providing a mechanistic rationale for group II intron-specific repression, our data support the hypothesis that RNA silencing of the host gene contributed to expulsion of group II introns from nuclear genomes and drove the evolution of spliceosomal introns.