The eukaryotic small nucleolar RNAs (snoRNAs) are involved in processing of pre-rRNA and modification of rRNA nucleotides. Some snoRNAs are derived from mono- or polycistronic transcription units, whereas others are encoded in introns of protein genes. The present study addresses the role of the RNA lariat-debranching enzyme (Dbr1p) in the synthesis and function of intronic snoRNAs in the yeast Saccharomyces cerevisiae. Intronic snoRNA production was determined to depend on Dbr1p. Accumulation of mature intronic snoRNAs is reduced in a dbr1 mutant; instead, intronic snoRNAs are “trapped” within host intron lariats. Interestingly, the extent of intronic snoRNA accumulation in the form of lariats in dbr1 cells varied among different intronic snoRNAs. Intronic snoRNAs encoded within shorter introns, such as U24 and snR38, accumulate more unprocessed lariat precursors than those encoded within longer introns, e.g., U18 and snR39. This correlation was corroborated by experiments conducted with model intron:U24 snoRNA constructs. These results support a splicing-dependent exonucleolytic pathway for the biosynthesis of intronic snoRNAs. Curiously, U24 in a lariat may be functional in directing methylation of ribosomal RNA.