Several features of the split td gene of phage T4 suggest an RNA processing mechanism analogous to that of the self-splicing rRNA of Tetrahymena and other group I eukaryotic introns. Previous work has revealed conserved sequence elements and the ability of td-encoded RNA to self-splice in vitro. We show here that a noncoded guanosine residue is covalently joined to the 5' end of the intron during processing. Further, we demonstrate the existence of linear and circular intron forms in RNA extracted from T4-infected cells and from uninfected Escherichia coli expressing the cloned td gene. Sequence analysis of the intron cyclization junction indicates that the noncoded guanosine and one additional nucleotide are lost from the 5' end of the intron upon cyclization. This analysis places a uridine residue upstream of the cyclization site, in analogy to three other group I cyclization junctions. These striking similarities to the splicing intermediates of eukaryotic group I introns point not only to an analogous processing pathway and conserved features of cyclization site recognition but also to a common ancestry between this prokaryotic intervening sequence and the group I eukaryotic introns.