The maturation of many small nuclear RNAs is dependent on RNase III-like endonuclease mediated cleavage, which generates a loading site for the exosome complex that trims the precursor at its 3' end. Using a temperature sensitive Pac1 nuclease, here we show that the endonuclease cleavage is equally important in terminating the transcription of the U2 snRNA in Schizosaccharomyces pombe. Using a temperature sensitive Dhp1p 5'-->3' exonuclease, we demonstrate that it also is an essential component of the termination pathway. Taken together the results support a "reversed torpedoes" model for the termination and maturation of the U2 snRNA; the Pac1 endonuclease cleavage provides entry sites for the 3' and 5' exonuclease activities, leading to RNA maturation in one direction and transcript termination in the other.