U2 is the most extensively modified of all spliceosomal snRNAs. We previously showed that at least some of the internally modified nucleotides in U2 snRNA are required for snRNP biogenesis and pre-mRNA splicing. Recent work from several laboratories suggests that nuclear guide RNAs facilitate U2 snRNA internal modification, including pseudouridylation and 2′-O-methylation. Here, we present a novel approach to identifying guide RNAs for U2 pseudouridylation. Several Xenopus oocyte nuclear RNAs were affinity selected with U2 snRNA substituted with 5-fluorouridine, a pseudouridylation inhibitor that sequesters pseudouridylases. One of these RNAs was sequenced and found to be a novel RNA of 134 nt. This small RNA contains an H/ACA motif and folds into a typical H/ACA RNA structure, and its authenticity as an H/ACA RNA was confirmed by immunoprecipitation analysis. The RNA contains two guide sequences for pseudouridylation (Ψ) of U2 snRNA at positions 34 and 44 in the branch-site recognition region, and we demonstrate that this RNA indeed guides the formation of Ψ34 and Ψ44 in U2 using a Xenopus oocyte reconstitution system. Therefore, this novel RNA was designated pugU2-34/44, for pseudouridylation guide for U2 snRNA U34 and U44. Intranuclear localization analyses indicate that pugU2-34/44 resides within the nucleoplasm rather than nucleoli or Cajal bodies where other guide RNAs have been localized. Our results clarify the mechanism of U2 snRNA pseudouridylation in Xenopus oocytes, and have interesting implications with regard to the intranuclear localization of U2 snRNA pseudouridylation.