Although some viroid-like satellite RNAs possess self-cleavage and self-ligation activities, we show that the peach latent mosaic viroid (PLMVd) is unique among all known viroids since it also has such activities. These catalytic activities should have important roles in the rolling circle replication of PLMVd. According to this proposed mechanism, self-cleavage of the multimeric strands occurs via hammerhead structures producing monomers possessing 2′,3′-cyclic phosphate and 5′-hydroxyl termini. In the most stable predicted secondary structure for PLMVd these two extremities are juxtaposed, in order for self-ligation to occur. To establish the nature of the phosphodiester bond produced by self-ligation, we followed the classical procedure of complete enzymatic RNA hydrolysis coupled with thin layer chromatography fractionation. Using this procedure, we report that the self-ligation of PLMVd transcripts produces almost exclusively the 2′,5′ isomer (>96%). Primer extension assays also revealed that reverse transcriptase can read througth this 2′,5′ linkage, suggesting that it does not prevent further replication of the viroid. Moreover, we have observed that this 2′,5′ linkage is resistant to the debranching activity contained in nuclear extracts, as well as being capable of preventing further viroid self-cleavage. Thus, if viroids do indeed self-ligate in vivo, the resulting 2′,5′-phosphodiester bond could contribute to the stability of these RNA species. Finally, an analysis of both the sequence and the structural requirements for hammerhead self-cleavage and self-ligation suggests that these two RNA processes may be interrelated. We hypothesize that the intramolecular self-ligation which produces circular conformers may contribute to the circularization step of the rolling circle replication, while the intermolecular non-enzymatic ligation is a potential mechanism for the sequence reassortment of viroids and viroid-like species.