The terminal intron (bI2) of the yeast mitochondrial cytochrome b gene is a group I intron capable of self-splicing in vitro at high concentrations of Mg2+. Excision of bI2 in vivo, however, requires a protein encoded by the nuclear gene CBP2. The CBP2 protein has been partially purified from wild-type yeast mitochondria and shown to promote splicing at physiological concentrations of Mg2+. The self-splicing and protein-dependent splicing reactions utilized a guanosine nucleoside cofactor, the hallmark of group I intron self-splicing reactions. Furthermore, mutations that abolished the autocatalytic activity of bI2 also blocked protein-dependent splicing. These results indicated that protein-dependent excision of bI2 is an RNA-catalyzed process involving the same two-step transesterification mechanism responsible for self-splicing of group I introns. We propose that the CBP2 protein binds to the bI2 precursor, thereby stabilizing the catalytically active structure of the RNA. The same or a similar RNA structure is probably induced by high concentrations of Mg2+ in the absence of protein. Binding of the CBP2 protein to the unspliced precursor was supported by the observation that the protein-dependent reaction was saturable by the wild-type precursor. Protein-dependent splicing was competitively inhibited by excised bI2 and by a splicing-defective precursor with a mutation in the 5' exon near the splice site but not by a splicing-defective precursor with a mutation in the core structure. Binding of the CBP2 protein to the precursor RNA had an effect on the 5' splice site helix, as evidenced by suppression of the interaction of an exogenous dinucleotide with the internal guide sequence.