We report here the genetic, molecular, and functional characterization of the Drosophila melanogaster minifly (mfl) gene. Genetic analysis shows that mfl is essential for Drosophila viability and fertility. While P-element induced total loss-of-function mutations cause lethality, mfl partial loss-of-function mutations cause pleiotropic defects, such as extreme reduction of body size, developmental delay, hatched abdominal cuticle, and reduced female fertility. Morphological abnormalities characteristic of apoptosis are found in the ovaries, and a proportion of eggs laid by mfl mutant females degenerates during embryogenesis. We show that mfl encodes an ubiquitous nucleolar protein that plays a central role in ribosomal RNA processing and pseudouridylation, whose known eukaryotic homologues are yeast Cfb5p, rat NAP57 and human dyskerin, encoded by the gene responsible for the X-linked dyskeratosis congenita disease. mfl genetic analysis represents the first in vivo functional characterization of a member of this highly conserved gene family from higher eukaryotes. In addition, we report that mfl hosts an intron encoded box H/ACA snoRNA gene, the first member of this class of snoRNAs identified so far from Drosophila.