Puromycin aminonucleoside selectively inhibits the synthesis of ribosomal RNA in human lung fibroblasts transformed by the oncogenic virus SV40. The mechanism of this inhibition was studied utilizing nuclei and nucleoli isolated from cells treated for 18 hours with 100 micrograms/ml of this compound. It was established that for a limited period of time nuclei and nucleoli isolated from the fibroblasts continue synthesis of RNA of size classes seen in intact cells, and that the inhibitory effect of aminonucleoside persists after isolation of these organelles. The inhibition was shown to be directed primarily to the activity of RNA polymerase I. Studies of the mechanism of this inhibition have indicated that the decreased rate of the polymerase reaction is not due to the impairment of the template function of nucleolar chromatin, and that unbound, as well as chromatin-bound, RNA polymerase I is present in both control and treated nucleoli. Analysis of the size distribution of the products of cell-free RNA synthesis showed that aminonucleoside pretreatment results in marked reduction in the synthesis of preribosomal 45S RNA, abnormal accumulation of 32S RNA, and reduced formation of mature ribosomal RNA species in the in vitro system. The data suggest that the inhibitory effect of aminonucleoside on ribosomal synthesis is due in part to a lower rate of transcription by RNA polymerase I of preribosomal RNA, and in part to its impaired maturation.