We used nuclear extracts from Drosophila Kc cells to characterize 3' end processing of Drosophila histone pre-mRNAs. Drosophila SLBP plays a critical role in recruiting the U 7 snRNP to the pre-mRNA and is essential for processing all five Drosophila histone pre-mRNAs. The Drosophila processing machinery strongly prefers cleavage after a fourth nucleotide following the stem-loop and favors an adenosine over pyrimidines in this position. Increasing the distance between the stem-loop and the HDE does not result in a corresponding shift of the cleavage site, suggesting that in Drosophila processing the U 7 snRNP does not function as a molecular ruler. Instead, SLBP directs the cleavage site close to the stem-loop. The upstream cleavage product generated in Drosophila nuclear extracts contains a 3' OH, and the downstream cleavage product is degraded by a nuclease dependent on the U 7 snRNP, suggesting that the cleavage factor has been conserved between Drosophila and mammalian processing. A 2'O-methyl oligonucleotide complementary to the first 17 nt of the Drosophila U 7 snRNA was not able to deplete the U 7 snRNP from Drosophila nuclear extracts, suggesting that the 5' end of the Drosophila U 7 snRNA is inaccessible. This oligonucleotide selectively inhibited processing of only two Drosophila pre-mRNAs and had no effect on processing of the other three pre-mRNAs. Together, these studies demonstrate that although Drosophila and mammalian histone pre-mRNA processing share common features, there are also significant differences, likely reflecting divergence in the mechanism of 3' end processing between vertebrates and invertebrates.