Soluble extracts of S. cerevisiae splice tRNA precursors which contain intervening sequences. The reaction goes to completion and requires ATP for the production of mature sequence tRNA. In the absence of ATP, half-tRNA molecules accumulate. Similar half-tRNA molecules appear as kinetic intermediates and accumulate if splicing is inhibited with pure, mature tRNA. Half-tRNA molecules have been purified. These half-tRNAs are efficiently ligated in an ATP-dependent reaction that is inhibited by added mature tRNA. The product of ligation is the expected mature sequence tRNA. The excised intervening sequence has also been identified. These results suggest an enzymatic mechanism for splicing which involves two independent steps.