ABSTRACT: Control of RNA turnover is a major, but poorly understood, aspect of gene regulation. In multicellular organisms, progress toward dissecting RNA turnover pathways has been made by defining some cis-acting sequences that function as either regulatory or cleavage targets (J. G. Belasco and G. Brawerman, Control of Messenger RNA Stability, 1993). However, the identification of genes encoding proteins that regulate or cleave target RNAs has been elusive (C. A. Beelman and R. Parker, Cell 81:79-183, 1995); this gap in knowledge has made it difficult to identify additional components of RNA turnover pathways. We have utilized a modified expression cloning strategy to identify a developmentally regulated gene from Drosophila melanogaster that encodes a RNase that we refer to as Clipper (CLP). Significant sequence matches to open reading frames encoding unknown functions identified from the Caenorhabditis elegans and Saccharomyces cerevisiae genome sequencing projects suggest that all three proteins are members of a new protein family conserved from lower eukaryotes to invertebrates. We demonstrate that a member of this new protein family specifically cleaves RNA hairpins and that this activity resides in a region containing five copies of a previously uncharacterized CCCH zinc finger motif. CLP's endoribonucleolytic activity is distinct from that associated with RNase A (P. Blackburn and S. Moore, p. 317-433, in P. D. Boyer, ed., The Enzymes, vol. XV, part B, 1982) and is unrelated to RNase III processing of rRNAs and tRNAs (J. G. Belasco and G. Brawerman, Control of Messenger RNA Stability, 1993, and S. A. Elela, H. Igel, and M. Ares, Cell 85:115-124, 1995). Our results suggest that CLP may function directly in RNA metabolism.