1. A precursor to small stable RNA, 10Sa RNA, accumulates in large amounts in a temperature sensitive RNase E mutant at non-permissive temperatures, and somewhat in an rnc (RNase III-) mutant, but not in an RNase P- mutant (rnp) or wild type E. coli cells. 2. Since p10Sa RNA was not processed by purified RNase E and III in customary assay conditions, we purified p10Sa RNA processing activity about 700-fold from wild type E. coli cells. 3. Processing of p10Sa RNA by this enzyme shows an absolute requirement for a divalent cation with a strong preference for Mn2+ over Mg2+. Other divalent cations could not replace Mn2+. 4. Monovalent cations (NH+4, Na+, K+) at a concentration of 20 mM stimulated the processing of p10Sa RNA and a temperature of 37 degrees C and pH range of 6.8-8.2 were found to be optimal. 5. The enzyme retained half of its p10Sa RNA processing activity after 30 min incubation at 50 degrees C. 6. Further characterization of this activity indicated that it is RNase III. 7. To further confirm that the p10Sa RNA processing activity is RNase III, we overexpressed the RNase III gene in an E. coli cells that lacks RNase III activity (rnc mutant) and RNase III was purified using one affinity column, agarose.poly(I).poly(C). 8. This RNase III preparation processed p10Sa RNA in a similar way as observed using the p10Sa RNA processing activity purified from wild type E. coli cells, confirming that the first step of p10Sa RNA processing is carried out by RNase III.