Nuclear tRNA genes are transcribed by RNA polymerase III (Pol III) and pre-tRNAs are processed into mature tRNAs via complex processes in the nucleus. We have developed an in vitro Pol III-dependent transcription system derived from tobacco cultured cells, which supports efficiently not only transcription of a variety of plant tRNA genes but also 5'-and 3'-end processing, nucleotide modification and splicing of intron-containing pre-tRNAs. The structures of in vitro transcripts have been confirmed by primer extension analysis and by RNase T1 fingerprinting. The optimal Mg2+ concentration differed for each step so that each reaction can be controlled by adjusting the Mg2+ concentration. At 1 mm Mg2+, only transcription occurs so that pre-tRNAs accumulate. The splicing reaction can be initiated by raising Mg2+ ions (> 5 mm) and enhanced by adding 1 mm hexamminecobalt chloride. Using the optimized system for the Nicotiana intron-containing tRNATyr gene, the precise initiation and termination sites of transcription and the splice sites were determined. The presence of 1 mm NAD+ in the reaction mixture leads to the removal of the 2' phosphate at the splice junction of tRNATyr, demonstrating the activity of a 2'-phosphotransferase in the tobacco nuclear extract. Many modified nucleosides such as m2G, m22G, m1A, phi27 and phi35 are introduced in either of the studied transcripts. As shown in other systems, the conversion of U35 to phi requires an intron-containing substrate.