A novel RNase activity was identified in a yeast RNA polymerase I (pol I) in vitro transcription system. Transcript cleavage occurred at the 3 end and was dependent on the presence of ternary pol I͞DNA͞RNA complexes and an additional protein factor not identical to transcription factor IIS (TFIIS). Transcript cleavage was observed both on arrested complexes at the linearized ends of the transcribed DNA and on intrinsic blocks of the DNA template. Shortened transcripts that remained associated within the ternary complexes were capable of resuming RNA chain elongation. Possible functions of the nuclease for transcript elongation or termination are discussed.RNA polymerase-associated transcript cleavage has recently emerged as a common feature of several prokaryotic and eukaryotic transcriptionally active enzyme complexes. Hydrolytic transcript cleavage was first demonstrated in Escherichia coli RNA polymerase ternary complexes (1): two E. coli transcription elongation factors, GreA and GreB, mediate RNA cleavage of nascent transcript followed by the loss of the 3Ј proximal fragment and resumption of elongation from the new 3Ј terminus (2-4). It is proposed that certain DNA sequences through which the elongating RNA polymerase has to pass lead to paused transcription complexes that can spontaneously convert into nonextensible, dead-end conformations and result in arrest of RNA chain elongation (5). Relief of dead ends and restart of elongation appear to be mediated by the 3Ј proximal cleavage of the transcripts by GreA or GreB to restore the RNA 3Ј terminus to the catalytic center of the RNA polymerase (4, 6).In eukaryotes, hydrolytic cleavage in transcriptionally active enzyme complexes has been shown to be associated with RNA polymerases (pol) I, II, and III. The pol II elongation complex utilizes a mechanism similar to the prokaryotic RNA polymerase to extend blocked transcripts with the help of the elongation factor TFIIS (transcription factor IIS) (7-9). In the presence of TFIIS the ternary complex cleaves up to 14 nt from the RNA in a 3Ј-5Ј manner, releasing predominantly monoand dinucleotides (10-13). This cleavage seems to be a prerequisite for TFIIS-mediated transcription through blocks of RNA chain elongation (11,12,(14)(15)(16).Although cleavage is highly dependent on the presence of TFIIS, the particular nucleolytic activity probably does not reside in this accessory factor. It seems likely that pol II possesses intrinsic hydrolytic activity, which is activated by the elongation factor (9,13,15,17,18). Recently, a 3Ј-5Ј exonuclease activity that is associated with yeast pol III ternary complexes was identified and shown not to depend on the presence of auxiliary proteins such as TFIIS (19).An exonuclease activity associated with pol I was described in a mammalian pol I transcription termination complex. This complex utilizes a DNA binding protein, TTFI (transcription termination factor I), to terminate pol I transcription. After termination, the 3Ј end of the pre-rRNA is shortened by 10 nucleoti...