The lariat capping ribozyme (LCrz) constitutes an independent class of ribozymes. It is the defining feature of twin-ribozyme group I introns found in eukaryotic microorganisms. Its main function is to provide an intron-encoded homing endonuclease mRNA with a 5′-cap necessitated by the expression of the mRNA from within an intron in a ribosomal RNA gene. The cap is a tiny lariat in which the first and the third nucleotides are linked with a 2′, 5′ phosphodiester bond. A model for the origin of LCrz from group I intron splicing ribozymes by structural reorganization is well-supported. This shows the emergence of a branching reaction in a group I ribozyme scaffold and may be important in explaining the evolution of RNA splicing.