Poly(A) tail removal is the first step in the degradation pathway for some mRNAs. The purified poly(A)-binding protein (PAB)-dependent poly(A) nuclease (PAN) from yeast removes mRNA poly(A) tails in vitro by a process similar to that observed in vivo. The exonucleolytic PAN degrades poly(A) and RNA bound by PAB, and can be activated by spermidine to degrade poly(A) in the absence of PAB. The shortening of the poly(A) tail down to 10-25 nucleotides and the terminal deadenylation of this short adenine tract are kinetically distinct reactions. Poly(A) shortening rates are stimulated by the yeast a-mating factor (MFA2) RNA 3' UTR sequence, and this occurs by switching PAN from a distributive to a more processive enzyme. Terminal deadenylation rates are also stimulated to different extents by various RNAs. Inversion of the MFA2 3' UTR sequence completely inhibits the terminal deadenylation reaction owing to the presence of an inhibitory element 70 nucleotides from the poly(A) tail. Other sequence elements inserted at a similar distance from the poly(A) tail also interfere with the reaction. These data suggest that the two phases of poly(A) degradation can be regulated by mRNA sequences, and they provide a mechanistic description of how this regulation could occur in vivo.