We have used block-substitution mutagenesis and in vitro transcription assays to identify cis-acting DNA sequence elements important for initiation and 3'-end formation of a U1 small nuclear RNA (snRNA) in the parasitic nematode Ascaris lumbricoides. Efficient initiation of synthesis by RNA polymerase II requires a compact element centered approximately 50 base pairs upstream of the transcriptional start site. Surprisingly, 3'-end formation of U1 snRNAs synthesized in vitro is solely dependent upon elements within the U1 coding sequence. In all other systems studied thus far, 3'-end formation of U snRNAs requires signals present in the 3'-flanking region. We also show that sequence elements that direct 3'-end formation of the A. lumbricoides trans-spliced leader RNA function when RNA synthesis is initiated from the U1 promoter. These results indicate that 3'-end formation of U snRNAs in nematodes is mechanistically distinct from the analogous process in higher eukaryotes.