RNAs in the mitochondria of Physarum polycephalum contain nonencoded nucleotides that are added during RNA synthesis. Essentially all steady-state RNAs are accurately and fully edited, yet the signals guiding these precise nucleotide insertions are presently unknown. To localize the regions of the template that are required for editing, we constructed a series of chimeric templates that substitute varying amounts of DNA either upstream of or downstream from C insertion sites. Remarkably, all sequences necessary for C addition are contained within approximately 9 base pairs on either side of the insertion site. In addition, our data strongly suggest that sequences within this critical region affect different steps in the editing reaction. Template alterations upstream of an editing site influence nucleotide selection and/or insertion, while downstream changes affect editing site recognition and templated extension from the added, unpaired nucleotide. The data presented here provide the first evidence that individual regions of the DNA template play discrete mechanistic roles and represent a crucial initial step toward defining the source of the editing specificity in Physarum mitochondria. In addition, these findings have mechanistic implications regarding the potential involvement of the mitochondrial RNA polymerase in the editing reaction.