RNase MRP is a site-specific ribonucleoprotein endoribonuclease that cleaves RNA from the mitochondrial origin of replication in a manner consistent with a role in priming leading-strand DNA synthesis. Despite the fact that the only known RNA substrate for this enzyme is complementary to mitochondrial DNA, the majority of the RNase MRP activity in a cell is found in the nucleus. The recent characterization of this activity in Saccharomyces cerevisiae and subsequent cloning of the gene coding for the RNA subunit of the yeast enzyme have enabled a genetic approach to the identification of a nuclear role for this ribonuclease. Since the gene for the RNA component of RNase MRP, NME1, is essential in yeast cells and RNase MRP in mammalian cells appears to be localized to nucleoli within the nucleus, we utilized both regulated expression and temperature-conditional mutations of NME1 to assay for a possible effect on rRNA processing. Depletion of the RNA component of the enzyme was accomplished by using the glucose-repressed GAL1 promoter. Shortly after the shift to glucose, the RNA component of the enzyme was found to be depleted severely, and rRNA processing was found to be normal at all sites except the B1 processing site. The B1 site, at the 5' end of the mature 5.8S rRNA, is actually composed of two cleavage sites 7 nucleotides apart. This cleavage normally generates two species of 5.8S rRNA at a ratio of 10:1 (small to large) in most eukaryotes. After RNase MRP depletion, yeast cells were found to have almost exclusively the larger species of 5.8S rRNA. In addition, an aberrant 309-nucleotide precursor that stretched from the A2 to E processing sites of rRNA accumulated in these cells. Temperature-conditional mutations in the RNase MRP RNA gene gave an identical phenotype. Translation in yeast cells depleted of the smaller 5.8S rRNA was found to remain robust, suggesting a possible function for two 5.8S rRNAs in the regulated translation of select messages. These results are consistent with RNase MRP playing a role in a late step of rRNA processing. The data also indicate a requirement for having the smaller form of 5.8S rRNA, and they argue for processing at the B1 position being composed of two separate cleavage events catalyzed by two different activities.