The replication-dependent histone mRNAs end in a conserved 26-nt sequence that forms a stem-loop structure. This sequence is required for histone pre-mRNA processing and plays a role in multiple aspects of histone mRNA metabolism. Two proteins that bind the 3' end of histone mRNA are found in Xenopus oocytes. xSLBP1 is found in the nucleus, where it functions in histone pre-mRNA processing, and in the cytoplasm, where it may control histone mRNA translation and stability. xSLBP2 is a cytoplasmic protein, inactive in histone pre-mRNA processing, whose expression is restricted to oogenesis and early development. These proteins are similar only in their RNA-binding domains (RBD). A chimeric protein (1-2-1) in which the RBD of xSLBP1 has been replaced with the RBD of xSLBP2 binds the stem-loop with an affinity similar to the original protein. The 1-2-1 protein efficiently localizes to the nucleus of the frog oocyte, but is not active in processing of histone pre-mRNA in vivo. This protein does not support processing in a nuclear extract, but inhibits processing by competing with the active SLBP by binding to the substrate. The 1-2-1 protein also inhibits processing of synthetic histone pre-mRNA injected into frog oocytes, but has no effect on processing of histone pre-mRNA transcribed from an injected histone gene. This result suggests that sequences in the RBD of xSLBP1 give it preferential access to histone pre-mRNA transcribed in vivo.