The 340-nucleotide RNA component of Saccharomyces cerevisiae RNase MRP is encoded by the single-copy essential gene, NME1. To gain additional insight into the proposed structure and functions of this endoribonuclease, we have extensively mutagenized the NME1 gene and characterized yeast strains expressing mutated forms of the RNA using a gene shuffle technique. Strains expressing each of 26 independent mutations in the RNase MRP RNA gene were characterized for their ability to grow at various temperatures and on various carbon sources, stability of the RNase MRP RNA and processing of the 5.8S rRNA (a nuclear function of RNase MRP). 11 of the mutations resulted in a lethal phenotype, six displayed temperature-conditional lethality, and several preferred a non-fermentable carbon source for growth. In those mutants that exhibited altered growth phenotypes, the severity of the growth defect was directly proportional to the severity of the 5.8S rRNA processing defect in the nucleus. Together this analysis has defined essential regions of the RNase MRP RNA and provides evidence that is consistent with the proposed function of the RNase MRP enzyme.