The carboxy-terminal domain (CTD) of the RNA polymerase II (RNApII) largest subunit consists of multiple heptapeptide repeats with the consensus sequence YSPTSPS. Different CTD phosphorylation patterns act as recognition sites for the binding of various messenger RNA processing factors, thereby coupling transcription and mRNA processing. Polyadenylation factors are co-transcriptionally recruited by phosphorylation of CTD serine 2 (ref. 2) and these factors are also required for transcription termination. RNApII transcribes past the poly(A) site, the RNA is cleaved by the polyadenylation machinery, and the RNA downstream of the cleavage site is degraded. Here we show that Rtt103 and the Rat1/Rai1 5' --> 3' exonuclease are localized at 3' ends of protein coding genes. In rat1-1 or rai1Delta cells, RNA 3' to polyadenylation sites is greatly stabilized and termination defects are seen at many genes. These findings support a model in which poly(A) site cleavage and subsequent degradation of the 3'-downstream RNA by Rat1 trigger transcription termination.

The RNA exosome complex is the most versatile RNA-degradation machine in eukaryotes. The exosome has a central role in several aspects of RNA biogenesis, including RNA maturation and surveillance. Moreover, it is emerging as an important player in regulating the expression levels of specific mRNAs in response to environmental cues and during cell differentiation and development. Although the mechanisms by which RNA is targeted to (or escapes from) the exosome are still not fully understood, general principles have begun to emerge, which we discuss in this Review. In addition, we introduce and discuss novel, previously unappreciated functions of the nuclear exosome, including in transcription regulation and in the maintenance of genome stability.

RNA polymerase II (Pol II) in Saccharomyces cerevisiae can terminate transcription via several pathways. To study how a mechanism is chosen, we analyzed recruitment of Nrd1, which cooperates with Nab3 and Sen1 to terminate small nucleolar RNAs and other short RNAs. Budding yeast contains three C-terminal domain (CTD) interaction domain (CID) proteins, which bind the CTD of the Pol II largest subunit. Rtt103 and Pcf11 act in mRNA termination, and both preferentially interact with CTD phosphorylated at Ser2. The crystal structure of the Nrd1 CID shows a fold similar to that of Pcf11, but Nrd1 preferentially binds to CTD phosphorylated at Ser5, the form found proximal to promoters. This indicates why Nrd1 cross-links near 5′ ends of genes and why the Nrd1–Nab3–Sen1 termination pathway acts specifically at short Pol II–transcribed genes. Nrd1 recruitment to genes involves a combination of interactions with CTD and Nab3.

The exosome complex is involved in multiple RNA processing and degradation pathways. How exosome is recruited to particular RNA substrates and then chooses between RNA processing and degradation modes remains unclear. We find that the RNA binding protein Nrd1, complexed with its partners Nab3, Sen1, and cap binding complex, physically interacts with the nuclear form of exosome. Nrd1 stimulates the RNA degradation activity of the exosome in vitro. However, Nrd1 can also block 3' to 5' degradation by the exosome at some Nrd1 binding sites. Nrd1 mutations share some phenotypes with exosome mutants, including increased readthrough transcription from several mRNA and sn/snoRNA genes. Therefore, Nrd1 may recruit exosome to RNA and influence the choice between processing and degradation. Since Nrd1 is known to bind RNA polymerase II and be important for sn/snoRNA 3' end processing, Nrd1 may link transcription and RNA 3' end formation with surveillance by the exosome.