Abstract Background Spt7 is an integral component of the multi-subunit SAGA complex that is required for the expression of ~10% of yeast genes. Two forms of Spt7 have been identified, the second of which is truncated at its C-terminus and found in the SAGA-like (SLIK) complex. Results We have found that C-terminal processing of Spt7 to its SLIK form (Spt7SLIK) and to a distinct third form (Spt7Form3) occurs in the absence of the SAGA complex components Gcn5, Spt8, Ada1 and Spt20, the latter two of which are required for the integrity of the complex. In addition, N-terminally truncated derivatives of Spt7, including a derivative lacking the histone fold, are processed, indicating that the C-terminus of Spt7 is sufficient for processing and that processing does not require functional Spt7. Using galactose inducible Spt7 expression, we show that the three forms of Spt7 appear and disappear at approximately the same rate with full-length Spt7 not being chased into Spt7SLIK or Spt7Form3. Interestingly, reduced levels of Spt7SLIK and Spt7Form3 were observed in a strain lacking the SAGA component Ubp8, suggesting a regulatory role for Ubp8 in the truncation of Spt7. Conclusion We conclude that truncation of Spt7 occurs early in the biosynthesis of distinct Spt7 containing complexes rather than being a dynamic process linked to the action of the SAGA complex in transcriptional regulation.