The analysis of the mitochondrial DNA of Isoetes engelmannii as a first representative of the lycophytes recently revealed very small introns and indications for extremely frequent RNA editing. To analyze functionality of intron splicing and the extent of RNA editing in I. engelmannii, we performed a comprehensive analysis of its mitochondrial transcriptome. All 30 groups I and II introns were found to be correctly removed, showing that intron size reduction does not impede splicing. We find that mRNA editing affects 1782 sites, which lead to a total of 1406 changes in codon meanings. This includes the removal of stop codons from 23 of the 25 mitochondrial protein encoding genes. Comprehensive sequence analysis of multiple cDNAs per locus allowed classification of partially edited sites as either inefficiently edited but relevant or as non-specifically edited at mostly low frequencies. Abundant RNA editing was also found to affect tRNAs in hitherto unseen frequency, taking place at 41 positions in tRNA-precursors, including the first identification of U-to-C exchanges in two tRNA species. We finally investigated the four group II introns of the nad7 gene and could identify 27 sites of editing, most of which improve base pairing for proper secondary structure formation.