Cleavage of pre-mRNA during 3'-end formation in yeast requires two protein factors, cleavage factor I (CF I) and cleavage factor (CF II). A 5300-fold purification of CF II indicates that four polypeptides of 150, 105, 100, and 90 kDa copurify with CF II activity. The 150-kDa protein is recognized by antibodies against Cft1, the yeast homologue of the 160-kDa subunit of the mammalian cleavage/polyadenylation specificity factor (CPSF). The 100-kDa subunit is identical to Brr5/Ysh1, a yeast protein with striking similarity to the 73-kDa subunit of CPSF. The 105-kDa protein, designated Cft2 (cleavage factor two) exhibits significant homology to the CPSF 100-kDa subunit. Cft2 is cross-linked to pre-mRNA substrate containing the poly(A) site and wild type upstream and downstream flanking sequences, but not to precleaved RNA lacking downstream sequences or to substrate in which the (UA)6 processing signal has been deleted. The specific binding of Cft2 to the RNA substrate is ATP-dependent, in agreement with the requirement of ATP for cleavage. The sequence-specific binding of Cft2 and the similarities of CF II subunits to those of CPSF supports the hypothesis that CF II functions in the cleavage of yeast mRNA 3'-ends in a manner analagous to that of CPSF in the mammalian system. These results provide additional evidence that certain features of the molecular mechanism of mRNA 3'-end formation are conserved between yeast and mammals, but also highlight unexpected differences.