Expression of the human insulin-like growth factor II (IGF-II) gene gives rise to a family of mRNAs which are expressed in a tissue- and developmental-specific manner. Recently, an IGF-II RNA species of 1.8 kb was detected which consists of the 3' terminal untranslated region of the last IGF-II exon. We have investigated the mechanism of formation of this RNA employing IGF-II minigenes. Analysis of the expression of these genes has revealed that the 1.8-kb RNA does not result from transcription activation, but arises by specific cleavage of IGF-II transcripts.