The Pescadillo protein was identified via a developmental defect and implicated in cell cycle progression. Here we report that human Pescadillo and its yeast homolog (Yph1p or Nop7p) are localized to the nucleolus. Depletion of Nop7p leads to nuclear accumulation of pre-60S particles, indicating a defect in subunit export, and it interacts genetically with a tagged form of the ribosomal protein Rpl25p, consistent with a role in subunit assembly. Two pre-rRNA processing pathways generate alternative forms of the 5.8S rRNA, designated 5.8SL and 5.8SS. In cells depleted for Nop7p, the 27SA3 pre-rRNA accumulated, whereas later processing intermediates and the mature 5.8SS rRNA were depleted. Less depletion was seen for the 5.8SL pathway. TAP-tagged Nop7p coprecipitated precursors to both 5.8SL and 5.8SS but not the mature rRNAs. We conclude that Nop7p is required for efficient exonucleolytic processing of the 27SA3 pre-rRNA and has additional functions in 60S subunit assembly and transport. Nop7p is a component of at least three different pre-60S particles, and we propose that it carries out distinct functions in each of these complexes.