We report a broadly applicable enzyme digestion strategy for introducing structure-switching functionality into small-molecule-binding aptamers. This procedure is based on our discovery that exonuclease III (Exo III) digestion of aptamers is greatly inhibited by target binding. As a demonstration, we perform Exo III digestion of a pre-folded three-way-junction (TWJ)-structured cocaine-binding aptamer and a stem-loop-structured ATP-binding aptamer. In the absence of target, Exo III catalyzes 3'-to-5' digestion of both aptamers to form short, single-stranded products. Upon addition of target, Exo III digestion is halted four bases prior to the target-binding domain, forming a major target-bound aptamer digestion product. We demonstrated that target-binding is crucial for Exo III inhibition. We then determine that the resulting digestion products of both aptamers exhibit a target-induced structure-switching functionality that is absent in the parent aptamer, while still retaining high target-binding affinity. We confirm that these truncated aptamers have this functionality by using an exonuclease I-based digestion assay and further evaluate this characteristic in an electrochemical aptamer-based cocaine sensor and a fluorophore-quencher ATP assay. We believe our Exo III-digestion method should be applicable for the generation of structure-switching aptamers from other TWJ- or stem-loop-containing small-molecule-binding aptamers, greatly simplifying the generation of functionalized sensor elements for folding-based aptasensors.