Spliceosomal introns evolved early in eukaryogenesis, originating from self-splicing group II introns that invaded the proto-eukaryotic genome1. Elements of these ribozymes, now called snRNAs (U1, U2, U4, U5, U6), were co-opted to excise these invasive elements. Prior to eukaryotic diversification, the spliceosome is predicted to have accumulated hundreds of proteins2. This early complexification has obscured our understanding of spliceosomal evolution. Reduced systems with few introns and tiny spliceosomes give insights into the plasticity of the splicing reaction and provide an opportunity to study the evolution of the spliceosome3,4. Microsporidia are intracellular parasites possessing extremely reduced genomes that have lost many, and in some instances all, introns5. In the purportedly intron-lacking genome of the microsporidian Pseudoloma neurophilia6, we identified two introns that are spliced at high levels. Furthermore, with only 14 predicted proteins, the P. neurophilia spliceosome could be the smallest known. Intriguingly, the few proteins retained are divergent compared to canonical orthologs. Even the central spliceosomal protein Prp8, which originated from the proteinaceous component of group II introns, is extremely divergent. This is unusual given that Prp8 is highly conserved across eukaryotes, including other microsporidia. All five P. neurophilia snRNAs are present, and all but U2 have diverged extensively, likely resulting from the loss of interacting proteins. Despite this divergence, U1 and U2 are predicted to pair with intron sequences more extensively than previously described. The P. neurophilia spliceosome is retained to splice a mere two introns and, with few proteins and reliance on RNA-RNA interactions, could function in a manner more reminiscent of presumed ancestral splicing.