background: Bioinformatic genome surveys indicate that self-cleaving ribonucleic acids (ribozymes) appear to be widespread among all domains of life, although the functions of only a small number have been validated by biochemical methods. Alternatively, cell-based reporter gene assays can be used to validate ribozyme function. However, reporter activity can be confounded by phenomena unrelated to ribozyme-mediated cleavage of RNA. results: We established a ribozyme reporter system in Escherichia coli in which a significant reduction of reporter activity is manifest when an active ribozyme sequence is fused to the reporter gene and the expression of a foreign Bacillus subtilis RNaseJ1 5' exonuclease is induced from a chromosomally-integrated gene in the same cell. conclusions: The reporter system could be useful for validating ribozyme function in candidate sequences identified from bioinformatics.