Replication of the giant RNA genome of severe acute respiratory syndrome (SARS) coronavirus (CoV) and synthesis of as many as eight subgenomic (sg) mRNAs are mediated by a viral replicase-transcriptase of outstanding complexity that includes an essential endoribonuclease activity. Here, we show that the CoV replicative machinery, unlike that of other RNA viruses, also uses an exoribonuclease (ExoN) activity, which is associated with nonstructural protein (nsp) 14. Bacterially expressed forms of SARS-CoV nsp14 were shown to act on both ssRNAs and dsRNAs in a 3'-->5' direction. The activity depended on residues that are conserved in the DEDD exonuclease superfamily. The protein did not hydrolyze DNA or ribose-2'-O-methylated RNA substrates and required divalent metal ions for activity. A range of 5'-labeled ssRNA substrates were processed to final products of approximately 8-12 nucleotides. When part of dsRNA or in the presence of nonlabeled dsRNA, the 5'-labeled RNA substrates were processed to significantly smaller products, indicating that binding to dsRNA in cis or trans modulates the exonucleolytic activity of nsp14. Characterization of human CoV 229E ExoN active-site mutants revealed severe defects in viral RNA synthesis, and no viable virus could be recovered. Besides strongly reduced genome replication, specific defects in sg RNA synthesis, such as aberrant sizes of specific sg RNAs and changes in the molar ratios between individual sg RNA species, were observed. Taken together, the study identifies an RNA virus ExoN activity that is involved in the synthesis of multiple RNAs from the exceptionally large genomic RNA templates of CoVs.