Ribosome biogenesis is a conserved process in eukaryotes that requires a large number of small nucleolar RNAs and trans-acting proteins. The Saccharomyces cerevisiae MRD1 (multiple RNA-binding domain) gene encodes a novel protein that contains five consensus RNA-binding domains. Mrd1p is essential for viability. Mrd1p partially co-localizes with the nucleolar protein Nop1p. Depletion of Mrd1p leads to a selective reduction of 18 S rRNA and 40 S ribosomal subunits. Mrd1p associates with the 35 S precursor rRNA (pre-rRNA) and U3 small nucleolar RNAs and is necessary for the initial processing at the A(0)-A(2) cleavage sites in pre-rRNA. The presence of five RNA-binding domains in Mrd1p suggests that Mrd1p may function to correctly fold pre-rRNA, a requisite for proper cleavage. Sequence comparisons suggest that Mrd1p homologues exist in all eukaryotes.