Terminal balls detected at the 5′-end of nascent ribosomal transcripts act as pre-rRNA processing complexes and are detected in all eukaryotes examined, resulting in illustrious Christmas tree images. Terminal balls (also known as SSU-processomes) compaction reflects the various stages of cotranscriptional ribosome assembly. Here, we have followed SSU-processome compaction in vivo by use of a chromatin immunoprecipitation (Ch-IP) approach and shown, in agreement with electron microscopy analysis of Christmas trees, that it progressively condenses to come in close proximity to the 5′-end of the 25S rRNA gene. The SSU-processome is comprised of independent autonomous building blocks that are loaded onto nascent pre-rRNAs and assemble into catalytically active pre-rRNA processing complexes in a stepwise and highly hierarchical process. Failure to assemble SSU-processome subcomplexes with proper kinetics triggers a nucleolar surveillance pathway that targets misassembled pre-rRNAs otherwise destined to mature into small subunit 18S rRNA for polyadenylation, preferentially by TRAMP5, and degradation by the 3′ to 5′ exoribonucleolytic activity of the Exosome. Trf5 colocalized with nascent pre-rRNPs, indicating that this nucleolar surveillance initiates cotranscriptionally.