A approximately 50-kDa protein binds specifically to the 3' terminus of 135-nucleotide Drosophila pre-5 S RNA. Unlabeled poly(U) competes out protein binding and stimulates the activity of a 3'-exonuclease, which eventually degrades the substrate to 120 nucleotides, the size of mature 5 S RNA. In its RNA binding and UV cross-linking properties, the endogenous poly(U)-binding protein resembles human La, an autoantigen that binds the U > 3 3' ends of vertebrate RNA polymerase III primary transcripts. This protein appears to inhibit a 3' exonuclease and could protect 5 S RNA for faithful processing and transport.