During the life cycle of the hypotrichous ciliate Oxytricha nova, a macronucleus containing short, gene-sized DNA molecules is produced from a copy of the chromosomal micronuclear genome. In order to characterize the process of macronuclear development, we have isolated and determined the DNA sequence of a particular macronuclear gene and its micronuclear precursor. The results of this analysis indicate that macronuclear telomeric sequences (5'C4A4(3') repeats) are not present at the ends of the gene in its micronuclear chromosomal location and must be added during development. In addition, the micronuclear copy of the gene contains three short blocks of sequence that must be removed during development, implying the involvement of a nucleic acid-splicing process in generating mature macronuclear genes.