RNA ligation can regulate RNA function by altering RNA sequence, structure and coding potential. For example, the function of XBP1 in mediating the unfolded protein response requires RNA ligation, as does the maturation of some tRNAs. Here, we describe a novel in vivo model in Caenorhabditis elegans for the conserved RNA ligase RtcB and show that RtcB ligates the xbp-1 mRNA during the IRE-1 branch of the unfolded protein response. Without RtcB, protein stress results in the accumulation of unligated xbp-1 mRNA fragments, defects in the unfolded protein response, and decreased lifespan. RtcB also ligates endogenous pre-tRNA halves, and RtcB mutants have defects in growth and lifespan that can be bypassed by expression of pre-spliced tRNAs. In addition, animals that lack RtcB have defects that are independent of tRNA maturation and the unfolded protein response. Thus, RNA ligation by RtcB is required for the function of multiple endogenous target RNAs including both xbp-1 and tRNAs. RtcB is uniquely capable of performing these ligation functions, and RNA ligation by RtcB mediates multiple essential processes in vivo.