The dynamic intra-nuclear localization of MRP RNA, the RNA component of the ribonucleoprotein enzyme RNase MRP, was examined in living cells by the method of fluorescent RNA cytochemistry (Wang, J., L.-G. Cao, Y.-L. Wang, and T. Pederson. 1991. Proc. Natl. Acad. Sci. USA. 88:7391-7395). MRP RNA very rapidly accumulated in nucleoli after nuclear microinjection of normal rat kidney (NRK) epithelial cells. Localization was specifically in the dense fibrillar component of the nucleolus, as revealed by immunocytochemistry with a monoclonal antibody against fibrillarin, a known dense fibrillar component protein, as well as by digital optical sectioning microscopy and 3-D stereo reconstruction. When MRP RNA was injected into the cytoplasm it was not imported into the nucleus. Nuclear microinjection of mutant MRP RNAs revealed that nucleolar localization requires a sequence element (nucleotides 23-62) previously implicated as a binding site for a nucleolar protein, the To antigen. These results demonstrate the dynamic localization of MRP RNA in the nucleus and provide important insights into the nucleolar targeting of MRP RNA.