Cartilage-hair hypoplasia (CHH), also known as metaphyseal chondrodysplasia McKusick type (OMIM no. 250250), is an autosomal recessive, multi-systemic disease characterized by disproportionate short stature, fine and sparse hair, deficient cellular immunity and a predisposition to malignancy. It is caused by mutations in RMRP, the RNA component of the ribonucleoprotein complex RNase MRP, and, thus, CHH represents one of few Mendelian disorders caused by mutations in a nuclear encoded, non-coding RNA. While studies in yeast indicate that RMRP contributes to diverse cellular functions, the pathogenesis of the human condition is unknown. Studies of our CHH patient cohort revealed mutations in both the promoter and the transcribed region of RMRP. While mutations in the promoter abolished transcription in vitro, RMRP RNA levels in patients with transcribed mutations were also decreased suggesting an unstable RNA. RMRP mutations introduced into the yeast ortholog, NME1, exhibited normal mitochondrial function, chromosomal segregation and cell cycle progression, while a CHH fibroblast cell line exhibited normal mitochondrial content. However, the most commonly found mutation in CHH patients, 70A>G, caused an alteration in ribosomal processing by altering the ratio of the short versus the long form of the 5.8S rRNA in yeast. Transcriptional profiling of CHH patient RNAs showed upregulation of several cytokines and cell cycle regulatory genes, one of which has been implicated in chondrocyte hypertrophy. These data suggest that alteration of ribosomal processing in CHH is associated with altered cytokine signalling and cell cycle progression in terminally differentiating cells in the lymphocytic and chondrocytic cell lineages.