The H/ACA RNAs represent an abundant, evolutionarily conserved and functionally diverse class of non-coding RNAs. Many H/ACA RNAs direct pseudouridylation of rRNAs and snRNAs, while members of the rapidly growing group of 'orphan' H/ACA RNAs participate in pre-rRNA processing, telomere synthesis and probably, in other nuclear processes. The yeast snR30 'orphan' H/ACA snoRNA has long been known to function in the nucleolytic processing of 18S rRNA, but its molecular role remained unknown. Here, we provide biochemical and genetic evidence demonstrating that during pre-rRNA processing, two evolutionarily conserved sequence elements in the 3'-hairpin of snR30 base-pair with short pre-rRNA sequences located in the eukaryote-specific internal region of 18S rRNA. The newly discovered snR30-18S base-pairing interactions are essential for 18S rRNA production and they constitute a complex snoRNA target RNA transient structure that is novel to H/ACA RNAs. We also demonstrate that besides the 18S recognition motifs, the distal part of the 3'-hairpin of snR30 contains an additional snoRNA element that is essential for 18S rRNA processing and that functions most likely as a snoRNP protein-binding site.