Macronuclei were isolated from logarithmically growing Tetrahymena cells in isoosmotic medium containing the weak detergent n-octanol and were purified in sucrose gradients. Electron microscopy revealed good structural preservation including intact nuclear envelopes. Initial rates of [3H]UTP incorporation into these nuclei were relatively high (2-4 pmol UMP/micrograms DNA per min), and 70 to 80% of transcription was resistant to alpha-amanitin, which is similar to the percentage of nuclear label associated with the nucleoli in electron microscopic autoradiograms. The use of transcription initiation inhibitors indicated that elongation of in vivo initiated pre-rRNA chains had essentially occurred in vitro. The radioactivity profiles of in vitro synthesized RNA in gels exhibit a heterogeneous pattern with the exception of a small peak corresponding to the length of pre-rRNA molecules. Detailed analysis of the extent and specificity of pre-rRNA processing was performed by RNA transfer hybridizations using cloned rDNA fragments as probes. The results show that the early processing events, i.e., splicing, 5'terminal and central cleavage of pre-rRNA, proceed faithfully, but at reduced rates and efficiencies. Furthermore, processing of pre-17S rRNA at the 3'end, and pre-26S rRNA at the 5'end, including the formation of immediate 5.8S rRNA precursors (ITS and 7S RNA), occurred. In contrast to previous in vivo results, a central hidden break was also introduced into part of nuclear 26S rRNA molecules. In addition to the known intermediates and by-products of processing, a large number of distinct fragments due to non-random cleavages of rRNA precursors appeared during in vitro incubation of macronuclei. Most prominent were two novel small RNA fragments from the 5'terminal end of pre-rRNA which may be products of alternative processing sites in the external transcribed spacer. Another small promoter-proximal RNA which is present in substantial amounts in vivo, was not formed under in vitro processing conditions, but degraded rapidly. This is further support to the notion that this RNA species may represent a product of premature transcription termination.