In vitro selection techniques were applied to the development of a DNA enzyme that contains three catalytically essential imidazole groups and catalyzes the cleavage of RNA substrates. Nucleic acid libraries for selection were constructed by polymerase-catalyzed incorporation of C5-imidazole-functionalized deoxyuridine in place of thymidine. Chemical synthesis was used to define a minimized catalytic domain composed of only 12 residues. The catalytic domain forms a compact hairpin structure that displays the three imidazole-containing residues. The enzyme can be made to cleave RNAs of almost any sequence by simple alteration of the two substrate-recognition domains that surround the catalytic domain. The enzyme operates with multiple turnover in the presence of micromolar concentrations of Zn2+, exhibiting saturation kinetics and a catalytic rate of > 1 min(-1). The imidazole-containing DNA enzyme, one of the smallest known nucleic acid enzymes, combines the substrate-recognition properties of nucleic acid enzymes and the chemical functionality of protein enzymes in a molecule that is small, yet versatile and catalytically efficient.