The human EBP2 protein was found by two-hybrid analysis to interact with the Epstein-Barr virus nuclear antigen 1 (EBNA1). Homologs of human EBP2 can be found in Caenorhabditis elegans, Schizosaccharomyces pombe, and in Saccharomyces cerevisiae, and they all share a conserved 200-300-amino acid block of residues at their C termini. To understand the cellular function of EBP2, we have begun to study the protein in S. cerevisiae. The yeast Ebp2 protein contains N-terminal, nucleolar-associated KKE motifs, and deletion analysis reveals that the C-terminal conserved region is required for the activity of the protein. The EBP2 gene codes for an essential protein that localizes to the nucleolus. Temperature-sensitive ebp2-1 mutants become depleted of ribosomes and cease to divide after several generations at the restrictive temperature of 36 degrees C. This decline in ribosome levels is accompanied by a diminution in the levels of the 35 S-derived recombinant RNAs (rRNAs) (in particular the 25 S and 5.8 S rRNAs). Pulse-chase, Northern, and primer extension analysis of the rRNA biosynthetic pathway indicates that ebp2-1 mutants are defective in processing the 27 SA precursor into the 27 SB pre-rRNA.