Ribozymes were discovered in 1982 by Tom Cech. For their discovery, Cech shared the 1989 Nobel Prize in Chemistry with Sidney Altman, who discovered the RNAase-P ribozyme which is found in all cells.

What are they?

Ribozymes are Nucleic acid strands that perform some catalytic function, and act as enzymes. Ribozymes are almost exclusively RNA, as opposed to DNA. They are, in short, RNA that does stuff. RNA is usually thought of as an information carrier in the cell, so RNA that does stuff is quite interesting to molecular biologists, like finding a book that can fold itself into a paper airplane.

What do they do?

RNA is best at matching base pairs with other RNA. Because of this, most Ribozymes work by modifying RNA. Generally, cutting, patching, and moving it around. The bulk of ribozymes I've been able to find are self-cleaving ribozymes. This means that their primary function is to cut themselves out of a stretch of RNA, patching the strands on either side back together.

Some Ribozymes will cut and manipulate other RNA strands, inserting or replacing small stretches with other small stretches, or cutting the strands at a specific point. For example, a ribozyme might attach to the RNA sequence ...GGCCGGCCUACCGGCCGG... and cut it between the U and the A into two separate strands.

How do they work?

Most ribozymes are RNA molecules. There are some DNA ribozymes, but the strength of the DNA backbone which gives it good fidelity and durability for holding information keeps it from making the folds needed for good enzymatic activity

Ribozymes work through base pair interactions, like most other RNA/DNA. Of the four RNA bases (G, U, A, and C), each is attracted to it's complement (C, A, U, and G respectively.) G and C bind particularly strongly. This means that a stretch of RNA which aligns multiple complementary pairs will end up folding to do so on its own:
GGGGGGGGGGGGCCCCCCCCCCCC

GGGGGGGGGGGG\
CCCCCCCCCCCC/

Ribozymes can have a lot of folds like this, with their strands bending or crossing over each other. This folding gives ribozymes their basic structure, and allows them to attach themselves to very specific sites on other RNA chains (or on their own.) These attractions, along with other forces from things like twisting in the RNA provide the force which allows the ribozyme to catalyze its reaction by, for example, applying stress which will snap an RNA bond at a particular site.

RNA bases can match up a whole lot of ways, and figuring out a way to model how an RNA strand will fold is almost as complex as predicting protein folding. Even with simplified rules, there can still be a huge number of possibilities to compare. As such, ribozyme folding is an active area of bioinformatics.

Ribozymes will also often use small metal ions like Mg2+ or K+ to strengthen interactions between certain bases, allowing them to do things they might otherwise not be able to do.

Types of Ribozymes

By far the most important Ribozymes are those in the ribosome. These ribozymes work together with normal enzymes, and with transfer RNA to put amino acids together into proteins based on messenger RNA.

Transfer RNA (tRNA) itself is a type of ribozyme, folding into a specific shape that binds to an amino acid.

RNAase-P is a ribozyme found in all cells that is vital to the production of tRNA, cleaving the 5' end, and allowing it to function.

Viroids are ribozymes that act like viruses. They are self-splicing, circular ribozymes, and include the Hammerhead, Hairpin, hepatitis delta virus (HDV), and Varkud Satellite (VS) virus.

Many introns are actually self-cleaving ribozymes that remove themselves from a strand of messenger RNA before it passes out of the nucleus. These are called type I and type II introns. The commonly studied tetrahymena thermophilia ribozyme is a Type I intron.

The last major class of ribozymes also deal with introns, exons, and the general process of mRNA splicing within the cell. They include the ribozymes involved in the spliceosome as well as trans-splicing ribozymes. Trans-splicing ribozymes can replace one stretch of RNA with another, and are currently being hotly researched as a method to fixed genetic damage before it gets out into the cell.

Ribozymes and the RNA world

The discovery of RNA that acted as both blueprint and tool for cellular mechanisms lead to the RNA world hyphothesis, namely that all life started as RNA. The recent (2001) discovery of a ribozyme that is capable of creating complementary RNA strands of up to 14 base pairs out of a soup of RNA-triphosphates certainly lends some excitement, but there's still a lot to more to investigate.
Disclaimer: I am not a molecular biologist. If anyone has more information, sees something wrong, or hears of anything new, please let me know.

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