The portion of the internal transcribed spacer 1 found on 20S pre-rRNA accumulates in Saccharomyces cerevisiae lacking 5'----3' exoribonuclease 1, showing that an endonucleolytic cleavage at the 3' terminus of 18S rRNA is involved in the 20S pre-rRNA to 18S mature rRNA conversion. Smaller fragments of the spacer sequence are also found. The exoribonuclease may be involved as a cytoplasmic RNase in the hydrolysis of the spacer.