The Chlamydomonas reinhardtii chloroplast genome possesses thousands of small dispersed repeats (SDRs), which are of unknown function. Here, we used the petA gene as a model to investigate the role of SDRs in mRNA 3' end formation. In wild-type cells, petA mRNA accumulated as a major 1.3-kb transcript, whose 3' end was mapped to the distal end of a predicted stem-loop structure. To determine whether this stem-loop was required for petA mRNA stability, a series of deletions was constructed. These deletion strains accumulated a variety of petA mRNAs, for which approximate 3' ends were deduced. These 3' ends were found to flank stem-loop structures, many of which were formed partially or completely from inverted copies of SDRs. All strains accumulated wild-type levels of cytochrome f, demonstrating that alternative 3' termini are compatible with efficient translation. The ability to form alternative mRNA termini using SDRs lends additional flexibility to the chloroplast gene expression apparatus and thus could confer an evolutionary advantage.