We have identified an RNA catalytic domain within the sequence of the 359 base long negative-strand satellite RNA of tobacco ringspot virus. The catalytic domain contains two minimal sequences of satellite RNA, a 50-base catalytic RNA sequence, and a 14-base substrate RNA sequence. The catalytic complex of catalytic RNA/substrate RNA represents a structure not previously found in any RNA catalytic reaction described to date. The reaction is truly catalytic since the catalytic RNA has multiple substrate cleavage events and is not consumed during the course of the reaction. A linear relationship is seen between reaction rate and catalytic RNA concentration. The reaction has a Km of 0.03 microM, a kcat of 2.1/min, a temperature optimum of near 37 degrees C, and an energy of activation of 19 kcal/mol.