Phosphorylated IRE1-alpha homodimers with bound ADP have endoribonuclease activity in their C-terminal (cytosolic) regions. In particular, the homodimers cleave an internal 26 nucleotide segment out of the Xbp-1 mRNA. In yeast the resulting RNAs are ligated by a tRNA ligase but the corresponding human enzyme has not been identified. The cleavage and ligation leads to a frameshift which results in a longer ORF that encodes Xbp-1 (S), the active form of the Xbp-1 transcription factor.
The ribonuclease activity of IRE1-alpha also degrades subsets of mRNAs in the vicinity of the ER membrane, thereby reducing the amount of protein entering the ER.
Xbp-1 mRNA that has been cleaved by IRE1-alpha encodes a 40 kd protein designated Xbp-1 (S). Xbp-1 (S) is a potent bZIP transcription factor that transits from the cytosol to the nucleus and binds the sequence CCACG in the ER Stress Responsive Element (ERSE).