The essential Saccharomyces cerevisiae PRP43 gene encodes a 767-amino acid protein of the DEXH-box family. Prp43 has been implicated in spliceosome disassembly (Arenas, J. E., and Abelson, J. N. (1997) Proc. Natl. Acad. Sci. U. S. A. 94, 11798-11802). Here we show that purified recombinant Prp43 is an RNA-dependent ATPase. Alanine mutations at conserved residues within motifs I ((119)GSGKT(123)), II ((215)DEAH(218)) and VI ((423)QRAGRAGR(430)) that diminished ATPase activity in vitro were lethal in vivo, indicating that ATP hydrolysis is necessary for the biological function of Prp43. Overexpression of lethal, ATPase-defective mutants in a wild-type strain resulted in dominant-negative growth inhibition. The ATPase-defective mutant T123A interfered in trans with the in vitro splicing function of wild-type Prp43. T123A did not affect the chemical steps of splicing or the release of mature mRNA from the spliceosome, but it blocked the release of the excised lariat-intron from the spliceosome. We show that the lariat-intron is not accessible to debranching by purified Dbr1 when it is held in the T123A-arrested splicing complex. Our results define a new ATP-dependent step of splicing that is catalyzed by Prp43.