RNAs derived from the genomic and antigenomic hepatitis delta virus are capable of self-cleavage, and thus have the potential for serving as ribozymes in a trans-cleaving reaction. Because the catalytic core of such an enzymatic RNA was not evident from phylogenetic data, we took a step-wise approach to identifying the core, reducing the RNA in size, and characterizing various properties for each size class. Thus, a 186-nucleotide antigenomic RNA (termed Ag180) was found to be capable of cleaving well in 20 M formamide (Smith and Dinter-Gottlieb, 1991), and this unusual stability in formamide was lost by reducing the 3' end of the molecule, leaving a 140-nucleotide RNA (Ag 140). Both RNAs showed only intramolecular cleavage at a wide range of concentrations, and a number of conformers could be seen in the Ag140 RNA, some of which were resistant to cleavage at 37 degrees C. Since Ag140 could not cleave in 20 M formamide, the 5' and 3' termini of Ag180 were truncated and produced Ag5-84, which cleaved to 100% at 37 degrees C in less than 0.25 min. Internal deletions of the Stem IV region resulted in Ag5-73, still capable of efficient cleavage, although with a lessened stability in formamide. A trans-cleaving enzyme-substrate pair was finally derived from this RNA, and it consisted of a 67-nucleotide enzyme that cleaved a 13-nucleotide RNA substrate.