A 1352-nucleotide intron within the Euglena gracilis chloroplast ycf8 gene has been characterized as a complex twintron with overlapping internal introns and alternative splicing pathways. Partially spliced pre-mRNAs were characterized by a combination of cDNA cloning and sequencing, Northern hybridization, and $1 nuclease protection analyses. In the predominant pathway, two internal group II introns (601 and 392 nucleotides} are spliced from subdomain ID of an external group II intron (359 nucleotides). In an alternative pathway, following excision of the 601-nucleotide intron, splicing of a group III intron occurs. This group IlI intron is recruited from sequences of the external intron and the 392-nucleotide intron. This is the first evidence that a group III intron can be derived from portions of existing group II introns. The mechanism of group III intron formation may also be relevant to the evolution of nuclear introns from putative group II intron ancestors.[Key Words: Complex twintron; alternative splicing; group III intron evolution; nuclear intron evolution; Euglena gracilis; chloroplast] Received April 15, 1994; revised version accepted May 18, 1994.Group II introns are present in prokaryotic, fungal and plant mitochondria, and plant chloroplast genomes (Michel et al. 1989;Ferat and Michel 1993). Group II introns have a conserved secondary structure. Several tertiary interactions are involved in formation of the catalytic core, such as exon binding site-intron binding site (EBS-IBS) pairing, guided pair, ~/~', e/~' and ~/~' interactions (Jacquier andMichel 1987, 1990;Michel et al. 1989;Jacquier and Jacquesson-Breuleux 1991; HarrisKerr et al. 1993). Splicing of group II introns occurs by two transesterification reactions (Peebles et al. 1986;Schmelzer and Schweyen 1986;van der Veen et al. 1986). In the first reaction, the 2' hydroxyl group of the unpaired adenosine in domain VI makes a nucleophilic attack on the first nucleotide of the intron, generating a free 5' exon and an intron lariat-3' exon intermediate. In the second reaction, the 3' hydroxyl of the 5' exon makes a nucleophilic attack on the first nucleotide of the 3' exon, resulting in exon ligation and release of the intron as a lariat RNA.The Euglena gracilis chloroplast genome contains at The E. gracilis chloroplast genome also contains short (91-119 nucleotides), A + U-rich group III introns. These introns do not have a domain V but retain group II-like 5' splice boundaries (Christopher and Hallick 1989). These introns have a domain VI that is used during lariat formation (Copertino et al. 1994), and some may also contain subdomain ID