The functional role of P2 stem-loop structure of T4 td intron in splicing in vivo and in vitro was investigated. Site-directed mutagenesis was employed to create the subtitution, deletion and reversion mutants of P2 stem=loop structure. Two substitution mutation(U16→G, A31→C) and on deletion mutation (G21□C26) resulted in a complete loss of enzyme activity whereas the compensatory double mutation restored about 82% of activity of the wild type. The transcription rate of two substitution mutations and P2 loop deletion is lower than that of the wild type. The disruption of P2 stem-loop structure by introducing substitution and deletion mutation resulted in a complete abolishment of Rna splicing in bitro. However, a compensatory double mutation showed splicing activity very similar to the wild type.