Protein splicing is an autocatalytic reaction of a single polypeptide in which a spliced intervening sequence is excised out and the two external regions are ligated with the peptide bond to yield two mature proteins. We examined the reaction mechanism using a folding-dependent in vitro protein splicing system. Protein splicing proceeds at an optimal pH of 7 and is an intramolecular reaction. The reaction is not inhibited by potential protease inhibitors, suggesting that its mechanism is different from those catalyzed by known proteases.