The rRNA genes of Leishmania donovani are organized on chromosome 27 as tandem repeats of approximately 12.5-kb units that each contain a promoter, the subunit rRNAs, and approximately 39 copies of a 64-bp species-specific sequence. The transcription initiation site was mapped to 1020 bp upstream of the 18S rRNA gene by RNase protection and primer extension. A 349-bp sequence between the 64-bp repeats and the 18S rRNA gene appears to contain a promoter, since it directs a 60-fold increase in luciferase expression over the no-insert control in transient transfection assays. Stepwise deletion and 10-bp replacement studies identified three domains that affect promoter activity. In strain LSB-51.1, a naturally occurring gene conversion with a portion of the LD1 sequence from chromosome 35 replaced the rRNA genes within one repeat unit, from downstream of the promoter to within the 64-bp repeats. Northern blot analysis of RNA from LSB-51.1 showed large transcripts from the external spacer regions that are not normally transcribed. These results imply that the gene conversion eliminated sequences at or near the 5' terminus of the 64-bp repeats which normally function in transcription termination.