The sequences directing formation of mRNA 3' ends in Saccharomyces cerevisiae are not well defined. This is in contrast to the situation in higher eukaryotes in which the sequence AAUAAA is known to be crucial to proper 3'-end formation. The AAUAAA hexanucleotide is found upstream of the poly(A) site in some but not all yeast genes. One of these is the gene coding for alcohol dehydrogenase, ADH2. Deletion or a double point mutation of the AAUAAA has only a small effect on the efficiency of the reaction, and in contrast to the mammalian system, it is most likely not operating as a major processing signal in the yeast cell. However, we isolated point mutations which reveal that a region located approximately 80 nucleotides upstream of the poly(A) site plays a critical role in either transcription termination, polyadenylation, or both. These mutations represent the first point mutations in yeasts which significantly reduce the efficiency of 3'-end formation.The formation of the 3' ends of eukaryotic mRNAs involves several steps, including termination of transcription, cleavage of precursor RNA, and addition of poly(A). In higher eukaryotes, it is known that termination of transcription by RNA polymerase II occurs downstream from the end of the mature mRNA. The actual end of the mRNA is produced by cleavage of the primary transcript and the subsequent addition of about 200 adenylate residues (for reviews, see references 30 and 36). The relationship between termination of transcription and RNA processing is not well understood, although it appears that termination requires valid RNA-processing sites (13,17,48). Polyadenylation has been studied both in vivo and in vitro in mammalian cells. From these studies, it is clear that sequences on the precursor RNA as well as several factors, including specificity factors, cleavage factors, and a poly(A) polymerase, are required for proper 3'-end formation (10,11,18,31,44). The cis-acting sequence which is most highly conserved in metazoans is the hexanucleotide AATAAA, usually found within 30 nucleotides (nt) 5' of the polyadenylation site. This sequence is clearly required for assembly of the processing complex and for cleavage and polyadenylation of the mRNA precursor (30,36 which results from transcription through a centromere (40) or an autonomously replicating sequence (42). For example, when a sequence from the 3' end of the yeast CYCI gene is placed between a promoter and the centromere, the plasmid is stabilized, suggesting that transcription termination is signalled by this CYCI sequence (40). Nuclear run-on experiments support this hypothesis (33). However, these experiments do not address the relationship between the processing of the transcripts and transcription termination, and this issue remains elusive.In this report, we describe an in vivo assay which uses 3-galactosidase production to quantitate the efficiency of 3'-end formation. We show that the AAUAAA sequence important for 3'-end formation of mammalian mRNAs is not required for the processing of a yeast ...