It is generally believed that splicing removes introns as single units from precursor messenger RNA transcripts. However, some long Drosophila melanogaster introns contain a cryptic site, known as a recursive splice site (RS-site), that enables a multi-step process of intron removal termed recursive splicing. The extent to which recursive splicing occurs in other species and its mechanistic basis have not been examined. Here we identify highly conserved RS-sites in genes expressed in the mammalian brain that encode proteins functioning in neuronal development. Moreover, the RS-sites are found in some of the longest introns across vertebrates. We find that vertebrate recursive splicing requires initial definition of an `RS-exon' that follows the RS-site. The RS-exon is then excluded from the dominant mRNA isoform owing to competition with a reconstituted 5' splice site formed at the RS-site after the first splicing step. Conversely, the RS-exon is included when preceded by cryptic promoters or exons that fail to reconstitute an efficient 5' splice site. Most RS-exons contain a premature stop codon such that their inclusion can decrease mRNA stability. Thus, by establishing a binary splicing switch, RS-sites demarcate different mRNA isoforms emerging from long genes by coupling cryptic elements with inclusion of RS-exons.