Telomerase RNA (TER) is an essential component of the telomerase ribonucleoprotein complex. The mechanism for TER 3′-end processing is highly divergent among different organisms. Here we report a unique spliceosome-mediated TER 3′-end cleavage mechanism in Neurospora crassa that is distinct from that found specifically in the fission yeast Schizosaccharomyces pombe. While the S. pombe TER intron contains the canonical 5′-splice site GUAUGU, the N. crassa TER intron contains a non-canonical 5′-splice site AUAAGU that alone prevents the second step of splicing and promotes spliceosomal cleavage. The unique N. crassa TER 5′-splice site sequence is evolutionarily conserved in TERs from Pezizomycotina and early branching Taphrinomycotina species. This suggests that the widespread and basal N. crassa-type spliceosomal cleavage mechanism is more ancestral than the S. pombe-type. The discovery of a prevalent, yet distinct, spliceosomal cleavage mechanism throughout diverse fungal clades furthers our understanding of TER evolution and non-coding RNA processing.