The 5' external transcribed spacer (5'ETS) is critical for 18S rRNA formation and is the longest noncoding region in a ribosomal RNA transcript. Here we show that processing in mouse 5'ETS involves two cleavage events. Processing at site A' corresponds to the previously described "primary cleavage," which precedes other processing steps. Processing at the novel site A0 occurs 1 kb downstream from A' yielding two new rRNA precursors: 43S and 29S. The excised 5'-A' and A'-A0 fragments are rapidly degraded under normal conditions. Depletion of the exosome component EXOSC10/PM-Scl100 (ortholog of yeast Rrp6p) results in a strong accumulation of the A'-A0 spacer fragment in mouse cells. We discuss the finding of a second processing site in mammalian 5'ETS in relation to the involvement of the U3 snoRNA in pre-rRNA processing and present a revised map of the mouse 18S rRNA processing pathway.