A recent study on yeast U3 snoRNA (Kufel et al. 2000) indicates that several events precede the addition of the trimethylguanosine cap at the 5 end. Yeast U3 snoRNA is made as a precursor with a 3 extension that can form a hairpin stem which is cleaved by the endonuclease Rnt1p. Subsequently, there is 3 exonuclease activity (probably the exosome; Allmang et al. 1999; van Hoof et al. 2000) that trims inward until it is further inhibited by Lhp1p (La homologous protein) which is bound to poly (U) tracts in the 3 tail of pre-U3 snoRNA. Yeast U3 snoRNA contains an intron near its 5 end (open arrow in Fig. 1)(Myslinski et al. 1990), and this is removed by splicing. Next, core proteins (Nop1p, Nop56p, Nop58p, and presumably Snu13p) bind the Box C/D motif at the 3 end, and their binding may cause the displacement of Lhp1p. After this has occurred, there is further exonucleolytic trimming by the exosome until the mature 3 end is reached. Probably the terminal stem and associated proteins prevent further digestion by the exosome. Only after all these events have occurred is the m7G cap converted to the m3 2, 2, 7G cap at the 5 end of the U3 molecule.