C16orf57 encodes a human protein of unknown function, and mutations in the gene occur in poikiloderma with neutropenia (PN), which is a rare, autosomal recessive disease. Interestingly, mutations in C16orf57 were also observed among patients diagnosed with Rothmund-Thomson syndrome (RTS) and dyskeratosis congenita (DC), which are caused by mutations in genes involved in DNA repair and telomere maintenance. A genetic screen in Saccharomyces cerevisiae revealed that the yeast ortholog of C16orf57, USB1 (YLR132C), is essential for U6 small nuclear RNA (snRNA) biogenesis and cell viability. Usb1 depletion destabilized U6 snRNA, leading to splicing defects and cell growth defects, which was suppressed by the presence of multiple copies of the U6 snRNA gene SNR6. Moreover, Usb1 is essential for the generation of a unique feature of U6 snRNA; namely, the 3'-terminal phosphate. RNAi experiments in human cells followed by biochemical and functional analyses confirmed that, similar to yeast, C16orf57 encodes a protein involved in the 2',3'-cyclic phosphate formation at the 3' end of U6 snRNA. Advanced bioinformatics predicted that C16orf57 encodes a phosphodiesterase whose putative catalytic activity is essential for its function in vivo. Our results predict an unexpected molecular basis for PN, DC, and RTS and provide insight into U6 snRNA 3' end formation.