The last step of tRNA splicing in the yeast Saccharomyces cerevisiae is catalyzed by an NAD-dependent 2'-phosphotransferase, which transfers the splice junction 2'-phosphate from ligated tRNA to NAD to produce ADP-ribose 1"-2" cyclic phosphate. We have purified the phosphotransferase about 28,000-fold from yeast extracts and cloned its structural gene by reverse genetics. Expression of this gene (TPT1) in yeast or in Escherichia coli results in overproduction of 2'-phosphotransferase activity in extracts. Tpt1 protein is essential for vegetative growth in yeast, as demonstrated by gene disruption experiments. No obvious binding motifs are found within the protein. Several candidate homologs in other organisms are identified by searches of the data base, the strongest of which is in Schizosaccharomyces pombe.