The RNase III family of double-stranded RNA-specific endonucleases is characterized by the presence of a highly conserved 9 amino acid stretch in their catalytic center known as the RNase III signature motif. We isolated the drosha gene, a new member of this family in Drosophila melanogaster. Characterization of this gene revealed the presence of two RNase III signature motifs in its sequence that may indicate that it is capable of forming an active catalytic center as a monomer. The drosha protein also contains an 825 amino acid N-terminus with an unknown function. A search for the known homologues of the drosha protein revealed that it has a similarity to two adjacent annotated genes identified during C. elegans genome sequencing. Analysis of the genomic region of these genes by the Fgenesh program and sequencing of the EST cDNA clone derived from it revealed that this region encodes only one gene. This newly identified gene in nematode genome shares a high similarity to Drosophila drosha throughout its entire protein sequence. A potential drosha homologue is also found among the deposited human cDNA sequences. A comparison of these drosha proteins to other members of the RNase III family indicates that they form a new group of proteins within this family.