Structural and mechanistic insight into stem‐loop RNA processing by yeast Pichia stipitis Dicer

Dicer is a member of the ribonuclease III enzyme family and processes double‐stranded RNA into small functional RNAs. The variation in the domain architecture of Dicer among different species whilst preserving its biological dicing function is intriguing. Here, we describe the structure and function of a novel catalytically active RNase III protein, a non‐canonical Dicer (PsDCR1), found in budding yeast Pichia stipitis. The structure of the catalytically active region (the catalytic RNase III domain and double‐stranded RNA‐binding domain 1 dsRBD1]) of DCR1 showed that RNaseIII domain is structurally similar to yeast RNase III (Rnt1p) but uniquely presents dsRBD1 in a diagonal orientation, forming a catalytic core made of homodimer and large RNA‐binding surface. The second dsRNA binding domain at C‐terminus, which is absent in Rnt1, enhances the RNA cleavage activity. Although the cleavage pattern of PsDCR1 anchors an apical loop similar to Rnt1, the cleavage activity depended on the sequence motif at the lower stem, not the apical loop, of hairpin RNA. Through RNA sequencing and RNA mutations, we showed that RNA cleavage by PsDCR1 is determined by the stem‐loop structure of the RNA substrate, suggesting the possibility that stem‐loop RNA‐guided gene silencing pathway exists in budding yeast.