3'-end formation of mouse pre-rRNA involves both transcription termination and a specific processing reaction.

We have studied the sequence requirements for 3'-end formation of rDNA transcripts in a cell-free system and show that the generation of correct ends of mouse pre-rRNA is brought about by a two-step process that involves a bona fide termination reaction, followed by a specific trimming of the primary transcript by 10 nucleotides. We show that termination of mouse ribosomal gene transcription by RNA polymerase I (pol I) takes place in front of an 18-bp DNA sequence element (the 'Sal box'), which was previously shown to function as termination signal. Termination of pol I transcription occurs at a fixed distance (11 bp) upstream of the Sal box, independent of the sequence of adjacent gene regions. The processing reaction, however, is strongly influenced by sequences flanking the termination signal at the 5' site. Substitution of a cluster of T residues by guanines within the region of 3'-end formation abolishes the 3'-terminal trimming of the primary transcript. Interestingly, this 3'-terminal processing event, which can be uncoupled from the termination reaction, requires both a correct 3' end and specific sequences in the 3'-terminal region of the primary transcript. Read-through transcripts generated in the extract system or by SP6 RNA polymerase are no substrate for the processing nuclease(s). Because the termination and processing activity can be separated chromatographically, the nucleolytic activity does not reside in TTF-I, the factor that binds to the Sal box and directs transcription termination.