In eukaryotes, nascent RNA transcripts undergo an intricate series of RNA processing steps to achieve mRNA maturation. RNA editing and alternative splicing are two major RNA processing steps that can introduce significant modifications to the final gene products. By tackling these processes in isolation, recent studies have enabled substantial progress in understanding their global RNA targets and regulatory pathways. However, the interplay between individual steps of RNA processing, an essential aspect of gene regulation, remains poorly understood. By sequencing the RNA of different subcellular fractions, we examined the timing of adenosine-to-inosine (A-to-I) RNA editing and its impact on alternative splicing. We observed that >95% A-to-I RNA editing events occurred in the chromatin-associated RNA prior to polyadenylation. We report about 500 editing sites in the 3′ acceptor sequences that can alter splicing of the associated exons. These exons are highly conserved during evolution and reside in genes with important cellular function. Furthermore, we identified a second class of exons whose splicing is likely modulated by RNA secondary structures that are recognized by the RNA editing machinery. The genome-wide analyses, supported by experimental validations, revealed remarkable interplay between RNA editing and splicing and expanded the repertoire of functional RNA editing sites.