We find that both human and rat U3 snRNA can function as self-priming templates for AMV reverse transcriptase in vitro. The 74 base cDNA is primed by the 3’end of intact U3 snRNA, and spans the characteristically truncated 69 or 70 base U3 sequence found in four different human U3 pseudogenes. The ability of human and rat U3 snRNA to self-prime is consistent with a U3 secondary structure model derived by a comparison between rat U3 snRNA and the homologous D2 snRNA from Dictyostelium discoideum. We propose that U3 pseudogenes are generated in vivo by integration of a self-primed cDNA copy of U3 snRNA at new chromosomai sites. We also consider the possibility that the same cDNA mediates gene conversion at the 5’end of bona fide U3 genes where, over the entire region spanned by the U3 cDNA, the two rat U3 sequence variants U3A and U3B are identical.