A hammerhead ribozyme designed to cleave the yeast ADE1 mRNA has been expressed in yeast under the control of a galactose-inducible promoter. RNA prepared from the galactose-induced yeast cultures possesses an activity that cleaves ADE1 mRNA in vitro. However, in spite of high expression levels of the ribozyme, no cleavage activity could be demonstrated in vivo. On the other hand, when the yeast cells expressing hammerhead RNA were treated with the alpha-factor mating pheromone, the level of ADE1 mRNA was reduced by 50%. Similar reductions were observed when this strain was cultured in the presence of lithium acetate or in nitrogen-free medium. Moreover, control experiments in which disabled hammerhead genes were expressed showed no such reductions. Extension of the length of the flanking recognition arms of the ribozyme from a total of 10 to 16 or 24 nucleotides diminished the inhibitory effect of the ribozyme. These data suggest that ribozymes are able to cleave a trans-RNA target in yeast.