The 2'-5' branch of nuclear premessenger introns is believed to have been inherited from self-splicing group II introns, which are retrotransposons of bacterial origin. Our crystal structures at 3.4 and 3.5 angstrom of an excised group II intron in branched ("lariat") form show that the 2'-5' branch organizes a network of active-site tertiary interactions that position the intron terminal 3'-hydroxyl group into a configuration poised to initiate reverse splicing, the first step in retrotransposition. Moreover, the branchpoint and flanking helices must undergo a base-pairing switch after branch formation. A group II-based model of the active site of the nuclear splicing machinery (the spliceosome) is proposed. The crucial role of the lariat conformation in active-site assembly and catalysis explains its prevalence in modern splicing.