A mutation in NMD3 was found to be lethal in the absence of XRN1, which encodes the major cytoplasmic exoribonuclease responsible for mRNA turnover. Molecular genetic analysis of NMD3 revealed that it is an essential gene required for stable 60S ribosomal subunits. Cells bearing a temperature-sensitive allele of NMD3 had decreased levels of 60S subunits at the nonpermissive temperature which resulted in the formation of half-mer polysomes. Pulse-chase analysis of rRNA biogenesis indicated that 25S rRNA was made and processed with kinetics similar to wild-type kinetics. However, the mature RNA was rapidly degraded, with a half-life of 4 min. Nmd3p fractionated as a cytoplasmic protein and sedimented in the position of free 60S subunits in sucrose gradients. These results suggest that Nmd3p is a cytoplasmic factor required for a late cytoplasmic assembly step of the 60S subunit but is not a ribosomal protein. Putative orthologs of Nmd3p exist in Drosophila, in nematodes, and in archaebacteria but not in eubacteria. The Nmd3 protein sequence does not contain readily recognizable motifs of known function. However, these proteins all have an amino-terminal domain containing four repeats of Cx2C, reminiscent of zinc-binding proteins, implicated in nucleic acid binding or protein oligomerization.