Pseudouridine is the most abundant modified nucleotide in ribosomal RNA throughout eukaryotes and archaea but its role is not known. Here we produced mouse embryonic fibroblast cells expressing only catalytically inactive dyskerin, the pseudouridine synthase that converts uridine to pseudouridine in ribosomal RNA. The mutant dyskerin protein, D125A, was extremely unstable but cells were able to divide and grow very slowly. Abnormalities in ribosome RNA synthesis were apparent but mature cytoplasmic RNAs lacking pseudouridine were produced and were very unstable. We conclude that pseudouridine is required to stabilize the secondary structure of ribosomal RNA that is essential for its function.