The Saccharomyces cerevisiae temperature-sensitive (ts) allele nip7-1 exhibits phenotypes associated with defects in the translation apparatus, including hypersensitivity to paromomycin and accumulation of halfmer polysomes. The cloned NIP7+ gene complemented the nip7-1 ts growth defect, the paromomycin hypersensitivity, and the halfmer defect. NIP7 encodes a 181-amino-acid protein (21 kDa) with homology to predicted products of open reading frames from humans, Caenorhabditis elegans, and Arabidopsis thaliana, indicating that Nip7p function is evolutionarily conserved. Gene disruption analysis demonstrated that NIP7 is essential for growth. A fraction of Nip7p cosedimented through sucrose gradients with free 60S ribosomal subunits but not with 80S monosomes or polysomal ribosomes, indicating that it is not a ribosomal protein. Nip7p was found evenly distributed throughout the cytoplasm and nucleus by indirect immunofluorescence; however, in vivo localization of a Nip7p-green fluorescent protein fusion protein revealed that a significant amount of Nip7p is present inside the nucleus, most probably in the nucleolus. Depletion of Nip7-1p resulted in a decrease in protein synthesis rates, accumulation of halfmers, reduced levels of 60S subunits, and, ultimately, cessation of growth. Nip7-1p-depleted cells showed defective pre-rRNA processing, including accumulation of the 35S rRNA precursor, presence of a 23S aberrant precursor, decreased 20S pre-rRNA levels, and accumulation of 27S pre-rRNA. Delayed processing of 27S pre-rRNA appeared to be the cause of reduced synthesis of 25S rRNA relative to 18S rRNA, which may be responsible for the deficit of 60S subunits in these cells.