Many small nucleolar RNAs are processed from introns of host genes, but the importance of splicing for proper biogenesis and the fate of the snoRNAs is not well understood. Here we show that inactivation of splicing factors or mutation of splicing signals leads to the accumulation of incorrectly processed hybrid mRNA-snoRNA transcripts (hmsnoRNA). HmsnoRNAs are processed to the mature 3′-end of the snoRNA by the nuclear exosome and bound by snoRNP proteins, but they are targeted by the major cytoplasmic mRNA decay pathway due to their mRNA-like 5′-extensions. These results show that completion of splicing is required for full and accurate processing of intron-encoded snoRNAs and that splicing defects lead to degradation of hybrid mRNA-snoRNA species by cytoplasmic decay, uncovering a novel aspect of the importance of splicing for the biogenesis of intron encoded snoRNAs.