Nucleoli contain complex populations of small nucleolar RNAs (snoRNAs) likely to be involved in pre-rRNA processing and ribosome biogenesis. A growing family of snoRNAs which interacts with nucleolar protein fibrillarin is structurally related by the presence of long complementarities to rRNA (12 to 21 nucleotides) and of a pair of common sequence motifs, termed boxes C and D. All are encoded in introns and produced by processing of intronic RNA. We have analysed the mechanism of processing of one of these snoRNAs, U20, by transfection in mouse cells. We show here that the cis-acting signals for its processing are restricted to a minor portion of the mature snoRNA sequence. A terminal structure in which the two box motifs are brought in close vicinity by the pairing of the 5' and 3' terminal nucleotides is sufficient to direct faithful processing. Particularly, the key role of the terminal stem shared by most snoRNAs of this family is demonstrated by the effect of compensatory mutations. Our results also indicate that faithful processing at both ends of the snoRNA can be uncoupled and that it is not strictly dependent on pre-mRNA splicing. Finally, our data point to the exclusive involvement of 5'-->3' and 3'-->5' exonucleolytic activities in the processing of intronic snoRNAs of this family.