The endoribonuclease tRNase Z plays an essential role in tRNA metabolism by removal of the 3' trailer element of precursor RNAs. To investigate tRNA processing in archaea, we identified and expressed the tRNase Z from Haloferax volcanii, a halophilic archaeon. The recombinant enzyme is a homodimer and efficiently processes precursor tRNAs. Although the protein is active in vivo at 2-4 M KCl, it is inhibited by high KCl concentrations in vitro, whereas 2-3 M (NH4)(2)SO4 do not inhibit tRNA processing. Analysis of the metal content of the metal depleted tRNase Z revealed that it still contains 0.4 Zn2+ ions per dimer. In addition tRNase Z requires Mn2+ ions for processing activity. We compared the halophilic tRNase Z to the homologous one from Pyrococcus furiosus, a thermophilic archaeon. Although both enzymes have 46% sequence similarity, they differ in their optimal reaction conditions. Both archaeal tRNase Z proteins process mitochondrial pre-tRNAs. Only the thermophilic tRNase Z shows in addition activity toward intron containing pre-tRNAs, 5' extended precursors, the phosphodiester bis(p-nitrophenyl)phosphate (bpNPP) and the glyoxalase II substrate S-D-lactoylglutathion (SLG).