Three of the four eukaryotic ribosomal RNA molecules (18S, 5.8S and 25-28S rRNA) are transcribed as a single precursor, which is subsequently processed into the mature species by a complex series of cleavage and modification reactions. Early cleavage at site A1 generates the mature 5'-end of 18S rRNA. Mutational analyses have identified a number of upstream regions in the 5' external transcribed spacer (5' ETS), including a U3 binding site, which are required in cis for processing at A1. Nothing is known, however, about the requirement for cis-acting elements which define the position of the 5'-end of the 18S rRNA or of any other eukaryotic rRNA. We have introduced mutations around A1 and analyzed them in vivo in a genetic background where the mutant pre-rRNA is the only species synthesized. The results indicate that the mature 5'-end of 18S rRNA in yeast is identified by two partially independent recognition systems, both defining the same cleavage site. One mechanism identifies the site of cleavage at A1 in a sequence-specific manner involving recognition of phylogenetically conserved nucleotides immediately upstream of A1 in the 5' ETS. The second mechanism specifies the 5'-end of 18S rRNA by spacing the A1 cleavage at a fixed distance of 3 nt from the 5' stem-loop/pseudoknot structure located within the mature sequence. The 5' product of the A1 processing reaction can also be identified, showing that, in contrast to yeast 5.8S rRNA, the 5'-end of 18S rRNA is generated by endonucleolytic cleavage.