The sporadic distribution of nuclear group I introns among different fungal lineages can be explained by vertical inheritance of the introns followed by successive losses, or horizontal transfers from one lineage to another through intron homing or reverse splicing. Homing is mediated by an intron-encoded homing endonuclease (HE) and recent studies suggest that the introns and their associated HE gene (HEG) follow a recurrent cyclical model of invasion, degeneration, loss, and reinvasion. The purpose of this study was to compare this model to the evolution of HEGs found in the group I intron at position S943 of the nuclear ribosomal DNA of the lichen-forming fungus Pleopsidium. Forty-eight S943 introns were found in the 64 Pleopsidium samples from a worldwide screen, 22 of which contained a full-length HEG that encodes a putative 256-amino acid HE, and 2 contained HE pseudogenes. The HEGs are divided into two closely related types (as are the introns that encode them) that differ by 22.6% in their nucleotide sequences. The evolution of the Pleopsidium intron-HEG element shows strong evidence for a cyclical model of evolution. The intron was likely acquired twice in the genus and then transmitted via two or three interspecific horizontal transfers. Close geographical proximity plays an important role in intron-HEG horizontal transfer because most of these mobile elements were found in Europe. Once acquired in a lineage, the intron-HEG element was also vertically transmitted, and occasionally degenerated or was lost.