Previous work from this laboratory [Dompenciel,R.E., Garnepudi,V.R. and Schoenberg,D.R. (1995)J. Biol. Chem.270, 6108-6118] described the purification and properties of an estrogen-regulated endonuclease isolated from Xenopus liver polysomes that is involved in the destabilization of albumin mRNA. The present study mapped cleavages made by this enzyme onto the secondary structure of the portion of albumin mRNA bearing the major cleavage sites. The predominant cleavages occur in the overlapping APyrUGA sequence AUUGACUGA present in a single-stranded loop region, and in AUUGA located within a bulged AU-rich stem. A structural mutation which converted the major loop cleavage site to a hairpin bearing one APyrUGA element eliminated cleavage at the intact site. This confirms that the polysomal RNase is specific for single-stranded RNA. Additional point mutations in the major loop characterized the nucleoside sequence requirements for cleavage. Finally, snake venom exonuclease was used to demonstrate the polysomal RNase generates products with a 3' hydroxyl. Binding of an estrogen-induced protein to a portion of the 3'UTR of vitellogenin mRNA may be involved in its stabilization by estrogen [Dodson,R.E. and Shapiro,D.J. (1994)Mol. Cell. Biol.14, 3130-3138]. The core binding site for this protein bears the sequence APyrUGA, suggesting that stabilization may be accomplished by occlusion of a cleavage site for the polysomal RNase.