The nucleotide sequence of the 3' external transcribed spacer (3' ETS) region in Schizosaccharomyces pombe rDNA was determined to define structural features which mediate the termination of RNA transcription and subsequent rRNA maturation. S1 nuclease protection studies suggest three alternative termination sites and four cleavage sites in the processing of the 3' ETS sequence. Each of the termination sites precedes a "Sal box"-like sequence which has been demonstrated to mediate the termination of rRNA transcription in mammalian cells. A highly conserved extended hairpin structure in the ETS sequence was deleted by PCR-mediated mutagenesis and the mutant rDNA was expressed in vivo to determine its role in rRNA maturation. Despite an efficient expression of the mutant gene, mature 5.8 S or 25 S rRNA was not observed. Labelling kinetics and S1 nuclease protection analyses indicate that the deletion not only fully inhibits the removal of the 3' ETS but also fully inhibits the processive excision of the second internal transcribed spacer (ITS2). Instead, a relatively stable 27 S nRNA precursor remains easily detectable in the whole cell RNA population. The results demonstrate a critical dependence of ITS processing on the 3' ETS raising the possibility that these sequences interact in a common processing domain.