An RNA enzyme derived from the self-splicing intervening sequence of Tetrahymena thermophila catalyses sequence-specific cleavage of an oligodeoxyribonucleotide substrate. Compared with RNA, the DNA substrate is bound very weakly and is cleaved very slowly, revealing the importance of the RNA 2'-hydroxyl group in both the binding and chemical steps. The finding that catalysis by RNA can extend to DNA substrates indicates new possibilities for the transposition of intervening sequences and for the design of DNA cleavage agents with novel sequence specificities.