The ai5γ group II intron from yeast excises itself from precursor transcripts in the absence of proteins. When a shortened form of the intron containing all but the 3'-terminal six nucleotides is incubated with an exon 1 oligonucleotide and a 3' splice site oligonucleotide, a nucleotidyl transfer reaction occurs that mimics the second step of splicing. As this tripartite reaction provides a means to identify important functional groups in 3' splice site recognition and catalysis, we establish here a minimal kinetic framework and demonstrate that the chemical step is rate-limiting. We use this framework to characterize the metal ion specificity switch observed previously upon sulfur substitution of the 3'-oxygen leaving group and to elucidate by atomic mutagenesis the role of the neighboring 2'-OH in catalysis. The results suggest that both the 3'-oxygen leaving group and the neighboring 2'-OH are important ligands for metal ions in the transition state but not in the ground state and that the 2'-OH may play an additional role in transition state stabilization by donating a hydrogen bond. Metal specificity switch experiments combined with quantitative analysis show that the Mn2+ that interacts with the leaving group binds to the ribozyme with the same affinity as the metal ion that interacts with the neighboring 2'-OH, raising the possibility that a single metal ion mediates interactions with the 2'- and 3'-oxygen atoms at the 3' splice site.