The RNA world hypothesis requires that early translation be catalyzed by RNA enzymes. Here we show that a five-nucleotide RNA enzyme, reacting with a tetranucleotide substrate and elevated PheAMP, forms aminoacyl- and peptidyl-RNAs RNA-Phe through RNA-Phe(5). A second series of products is formed from RNA-Phe diesters, after trans migration of phenylalanine from the 2'- to the 3'- hydroxyl group of the substrate RNA, followed by reaminoacylation of the 2'-OH. While the ribozyme is required for initial attachment of phenylalanine to an RNA substrate, as well as reacylation (and thus for formation of all products), further extension into RNA-peptides appears to be an uncatalyzed, but RNA-stimulated reaction. The ribozyme readily turns over at high PheAMP and GCCU concentrations. Thus, GUGGC/GCCU comprises a true RNA enzyme. We define Michaelis-Menten parameters plus and minus divalent magnesium and characterize ca. 20 molecular species of aminoacyl-, peptidyl-, dipeptidyl-, and mixed peptidyl/aminoacyl-RNAs.