Transcription termination in the leader region of the Bacillus subtilis trp operon is regulated by binding of the 11-mer TRAP complex to nascent trp RNA, which results in formation of a terminator structure. Rapid decay of trp leader RNA, which is required to release the TRAP complex and maintain a sufficient supply of free TRAP, is mediated by polynucleotide phosphorylase (PNPase). Using purified B. subtilis PNPase, we showed that, when TRAP was present, PNPase binding to the 3' end of trp leader RNA and PNPase digestion of trp leader RNA from the 3' end were inefficient. These results suggested that initiation of trp leader RNA may begin with an endonuclease cleavage upstream of the transcription terminator structure. Such cleavage was observed in vivo. Mutagenesis of nucleotides at the cleavage site abolished processing and resulted in a 4-fold increase in trp leader RNA half-life. This is the first mapping of a decay-initiating endonuclease cleavage site on a native B. subtilis RNA.