ARD-1 is an endoribonuclease identified initially as the product of a human cDNA that complements mutations in rne, a gene that encodes Escherichia coli ribonuclease E. NIPP-1 was identified in bovine nuclear extracts as an inhibitor of protein phosphatase-1. Earlier work has shown that the protein-coding sequence of ARD-1 is identical to the carboxy-terminal third of NIPP-1. However, whether ARD-1 is present in eukaryotes as a distinct entity has been unclear, as neither ARD-1-specific transcripts nor ARD-1 protein were detected in mammalian cells in earlier studies. Here we show that ARD-1 exists in human cells as a discrete protein, and that the ARD-1 and NIPP-1 peptides are isoforms encoded by a single gene and the same alternatively spliced precursor RNA. A retained intron containing multiple translation stop codons that are configured to terminate translation and initiate nonsense-mediated decay, limits the production of cellular ARD-1 protein. Our results establish the process by which functionally disparate ARD-1 and NIPP-1 peptides are generated from the protein-coding sequence of the same gene in human cells.