RNases III are a family of double-stranded RNA (dsRNA) endoribonucleases involved in the processing and decay of a large number of cellular RNAs as well as in RNA interference. The dsRNA substrates of Saccharomyces cerevisiae RNase III (Rnt1p) are capped by tetraloops with the consensus sequence AGNN, which act as the primary docking site for the RNase. We have solved the solution structures of two RNA hairpins capped by AGNN tetraloops, AGAA and AGUU, using NMR spectroscopy. Both tetraloops have the same overall structure, in which the backbone turn occurs on the 3' side of the syn G residue in the loop, with the first A and G in a 5' stack and the last two residues in a 3' stack. A non-bridging phosphate oxygen and the universal G which are essential for Rnt1p binding are strongly exposed. The compared biochemical and structural analysis of various tetraloop sequences defines a novel family of RNA tetraloop fold with the consensus (U/A)GNN and implicates this conserved structure as the primary determinant for specific recognition of Rnt1p substrates.