Studies of yeast transcription have revealed the widespread distribution of 
intergenic RNA polymerase II transcripts. These cryptic unstable transcripts 
(CUTs) are rapidly degraded by the nuclear exosome. Yeast RNA binding proteins 
Nrd1 and Nab3 direct termination of sn/snoRNAs and recently have also been 
implicated in premature transcription termination of the NRD1 gene. In this 
paper, we show that Nrd1 and Nab3 are required for transcription termination of 
CUTs. In nrd1 and nab3 mutants, we observe 3'-extended transcripts originating 
from CUT promoters but failing to terminate through the Nrd1- and Nab3-directed 
pathway. Nrd1 and Nab3 colocalize to regions of the genome expressing antisense 
CUTs, and these transcripts require yeast nuclear exosome and TRAMP components 
for degradation. Dissection of a CUT terminator reveals a minimal element 
sufficient for Nrd1- and Nab3-directed termination. These results suggest that 
transcription termination of CUTs directed by Nrd1 and Nab3 is a prerequisite 
for rapid degradation by the nuclear exosome.