Group II introns aI1 and aI2 of the yeast mitochondrial COXI gene are mobile elements that encode an intron-specific reverse transcriptase (RT) activity. We show here that the introns of Saccharomyces cerevisiae ID41-6/161 insert site specifically into intronless alleles. The mobility is accompanied by efficient, but highly asymmetric, coconversion of nearby flanking exon sequences. Analysis of mutants shows that the aI2 protein is required for the mobility of both aI1 and aI2. Efficient mobility is dependent on both the RT activity of the aI2-encoded protein and a separate function, a putative DNA endonuclease, that is associated with the Zn2+ finger-like region of the intron reading frame. Surprisingly, there appear to be two mobility modes: the major one involves cDNAs reverse transcribed from unspliced precursor RNA; the minor one, observed in two mutants lacking detectable RT activity, appears to involve DNA level recombination. A cis-dominant splicing-defective mutant of aI2 continues to synthesize cDNAs containing the introns but is completely defective in both mobility modes, indicating that the splicing or the structure of the intron is required. Our results demonstrate that the yeast group II intron aI2 is a retroelement that uses novel mobility mechanisms.