3'-End formation of pre-mRNA in yeast and mammals follows a similar but distinct pathway. In Saccharomyces cerevisiae, the cleavage reaction can be reconstituted by two activities called cleavage factor I and II (CFI and CFII). A CFII component, designated CFT1 (cleavage factor two) was identified by its sequence similarity to the AAUAAA-binding subunit of the mammalian cleavage and polyadenylation specificity factor (CPSF), even though the AAUAAA signal sequence appears to play no role in yeast pre-mRNA 3' processing. Depletion of a yeast whole-cell extract with antibodies to CFT1 protein abolished cleavage and polyadenylation of pre-mRNAs. Addition of CFII restored cleavage activity, but not polyadenylation. Polyadenylation required the further addition of poly(A) polymerase and polyadenylation factor I, suggesting a close but not necessarily direct association of these two factors with the CFT1 protein.