Processing at the L3 polyadenylation site of human adenovirus-2 involves endonucleolytic cleavage generating the 3' terminal sequence -UAOH to which adenosine residues are added. This dinucleotide is 19 nucleotides downstream of the AAUAAA polyadenylation signal. The ATP analog cordycepin triphosphate (3' dATP) inhibits poly(A) synthesis, but precursor RNA is processed to give a product terminating in -UAAH. Addition of only one adenosine analog demonstrates that the initial poly(A) tract is synthesized by polymerization of single residues rather than by ligation of preformed poly(A). Cleavage is not coupled to polyadenylation since incubation with an ATP analog containing a non-hydrolyzable alpha--beta bond generates a product with a 3' terminus coincident with the -UAOH) addition site. Addition of this accurately processed RNA to a nuclear extract results in efficient polyadenylation, suggesting that downstream sequences are not required for synthesis of the poly(A) tract. Finally, processing at the L3 poly(A) site may involve both endonucleolytic and exonucleolytic activities.