The mitochondrial genome of kinetoplastids, including species of Trypanosoma and Leishmania, is an unprecedented DNA structure of catenated maxicircles and minicircles. Maxicircles represent the typical mitochondrial genome encoding components of the respiratory complexes and ribosomes. However, most mRNA sequences are cryptic, and their maturation requires a unique U insertion/deletion RNA editing. Minicircles encode hundreds of small guide RNAs (gRNAs) that partially anneal with unedited mRNAs and direct the extensive editing. Trypanosoma brucei gRNAs and mRNAs are transcribed as polycistronic precursors, which undergo processing preceding editing; however, the relevant nucleases are unknown. We report the identification and functional characterization of a close homolog of editing endonucleases, mRPN1 (mitochondrial RNA precursor-processing endonuclease 1), which is involved in gRNA biogenesis. Recombinant mRPN1 is a dimeric dsRNAdependent endonuclease that requires Mg 2+ , a critical catalytic carboxylate, and generates 2-nucleotide 39 overhangs. The cleavage specificity of mRPN1 is reminiscent of bacterial RNase III and thus is fundamentally distinct from editing endonucleases, which target a single scissile bond just 59 of short duplexes. An inducible knockdown of mRPN1 in T. brucei results in loss of gRNA and accumulation of precursor transcripts (pre-gRNAs), consistent with a role of mRPN1 in processing. mRPN1 stably associates with three proteins previously identified in relatively large complexes that do not contain mRPN1, and have been linked with multiple aspects of mitochondrial RNA metabolism. One protein, TbRGG2, directly binds mRPN1 and is thought to modulate gRNA utilization by editing complexes. The proposed participation of mRPN1 in processing of polycistronic RNA and its specific protein interactions in gRNA expression are discussed.