We have determined the DNA sequence encoding three sites in Bacillus subtilis phage SP82 early mRNA that are cleaved by a B. subtilis processing endonuclease. The products generated by cleavage of the RNA were sequenced to determine the exact points of RNA strand scission. We propose that the RNA surrounding each processing site forms a stable stem-loop structure and that cleavage occurs at the 5- side of specific adenosine residues located on the loop. The model is consistent with our previous observations that the active site of the enzyme recognizes double-stranded RNA. S1 mapping experiments with RNA-DNA hybrids established that the same cleavage sites are used both in vivo and in vitro. Examination of the B. subtilis processing sites on SP82 mRNA reveals distinctive features of primary and secondary structure that are not present in any of the E. coli RNAase III processing sites previously studied.