Protein B23 is an abundant nucleolar protein and putative ribosome assembly factor. The protein was analyzed for ribonuclease activity using RNA-embedded gels and perchloric acid precipitation assays. Three purified bacterially expressed forms of the protein, B23.1, B23.2 and an N-terminal polyhistidine tagged B23.1 as well as the natural protein were found to have ribonuclease activity. However, the specific activity of recombinant B23.1 was approximately 5-fold greater than that of recombinant B23.2. The activity was insensitive to human placental ribonuclease inhibitor, but was inhibited by calf thymus DNA in a dose dependent manner. The enzyme exhibited activity over a broad range of pH with an apparent optimum at pH 7.5. The activity was stimulated by but not dependent on the presence of low concentrations of Ca2+, Mg2+ or NaCl. The Ca2+ effect was saturable and only stimulatory in nature. In contrast, Mg2+ and NaCl exhibited optimal concentrations for stimulation and both inhibited the ribonuclease at concentrations above these optima. These data suggest that protein B23 has intrinsic ribonuclease activity. The location of protein B23 in subcompartments of the nucleolus that contain preribosomal RNA suggests that its ribonuclease activity plays a role in the processing of preribosomal RNA.