Background: Twin-ribozyme introns represent a complex class of mobile group I introns that harbour a lariat capping (LC) ribozyme and a homing endonuclease gene embedded in a conventional self-splicing group I ribozyme (GIR2). Twin-ribozyme introns have so far been confined to nucleolar DNA in Naegleria amoeboflagellates and the myxomycete Didymium iridis. Results: We characterize structural organization, catalytic properties and molecular evolution of a new twin-ribozyme intron in Allovahlkampfia (Heterolobosea). The intron contains two ribozyme domains with different functions in ribosomal RNA splicing and homing endonuclease mRNA maturation. We found Allovahlkampfia GIR2 to be a typical group IC1 splicing ribozyme responsible for addition of the exogenous guanosine cofactor (exoG), exon ligation and circularization of intron RNA. The Allovahlkampfia LC ribozyme, by contrast, represents an efficient self-cleaving ribozyme that generates a small 2′,5′ lariat cap at the 5′ end of the homing endonuclease mRNA, and thus contributes to intron mobility. Conclusions: The discovery of a twin-ribozyme intron in a member of Heterolobosea expands the distribution pattern of LC ribozymes. We identify a putative regulatory RNA element (AP2.1) in the Allovahlkampfia LC ribozyme that involves homing endonuclease mRNA coding sequences as an important structural component.