The positions of RNA processing events mediated by RNase III and of two ribosome binding sites have been defined in an in vitro transcript of 321 nucleotides initiated at the major leftward promoter (PL) of bacteriophage lambda. Purified RNase III makes two specific endonucleolytic cleavages in the transcript at points 88 and 197 nucleotides from the PL start. The positions of these cuts suggest a secondary structure for the RNase III recognition site which is similar to other RNase III sites in which double-stranded cleavage occurs. Structure mapping experiments reveal a pattern of cleavages made in the PL transcript by nucleases specific for single- or double-stranded RNA that support the structure proposed for the RNase III stem and provide clear evidence for the stem-loop formed in the RNA at the position of the N recognition (nutL) site. Our finding that ribosomes bind efficiently in vitro to the region of the PL transcript which includes the AUG codon at position 223 supports other evidence that this triplet is the N protein start codon. The existence of an additional ribosome binding site in the N gene leader region just downstream from the nutL site identifies a second position possibly used for translational initiation or regulation. Its occurrence suggests potential roles for ribosome interaction and/or translation of the leader RNA in regulating phage development and N gene expression.