Noncoding RNAs are increasingly being recognized as important players in eukaryote biology. However, despite major efforts in mapping the Caenorhabditis elegans transcriptome over the last couple of years, nonpolyadenylated and intermediate-size noncoding RNAs (is-ncRNAs) are still incompletely explored. We have combined an enzymatic approach with full-length RNA-Seq of is-ncRNAs in C. elegans. A total of 473 novel is-ncRNAs has been identified, of which a substantial fraction was associated with transcription factor binding sites and developmentally regulated expression patterns. Analysis of sequence and secondary structure permitted classification of more than 200 is-ncRNAs into several known RNA classes, while another 33 is-ncRNAs were identified as belonging to two previously uncharacterized groups of is-ncRNAs. Three of the unclassified is-ncRNAs contain the 5' Alu domain common to SRP RNAs and specifically bound with the SRP9/14 heterodimer in vitro. One of these (inc394) showed 65% sequence identity with the human, neuron-specific BC200 RNA. Structure-based clustering analysis and in vitro binding experiments supported the notion that the nematode stem-bulge RNAs (sbRNAs) are homologs (or functional analogs) of the Y RNAs. Moreover, analysis of the differential libraries showed that some mature snoRNAs undergo secondary 5' cap modification after processing of the primary transcript, thus suggesting the existence of a wider range of functional RNAs arising from processed and modified fragments of primary transcripts.