Rotavirus NSP2 is an abundant non-structural RNA-binding protein essential for forming the viral factories that support replication of the double-stranded RNA genome. NSP2 exists as stable doughnut-shaped octamers within the infected cell, representing the tail-to-tail interaction of two tetramers. Extending diagonally across the surface of each octamer are four highly basic grooves that function as binding sites for single-stranded RNA. Between the N and C-terminal domains of each monomer is a deep electropositive cleft containing a catalytic site that hydrolyzes the gamma-beta phosphoanhydride bond of any NTP. The catalytic site has similarity to those of the histidine triad (HIT) family of nucleotide-binding proteins. Due to the close proximity of the grooves and clefts, we investigated the possibility that the RNA-binding activity of the groove promoted the insertion of the 5'-triphosphate moiety of the RNA into the cleft, and the subsequent hydrolysis of its gamma-beta phosphoanhydride bond. Our results show that NSP2 hydrolyzes the gammaP from RNAs and NTPs through Mg(2+)-dependent activities that proceed with similar reaction velocities, that require the catalytic His225 residue, and that produce a phosphorylated intermediate. Competition assays indicate that although both substrates enter the active site, RNA is the preferred substrate due to its higher affinity for the octamer. The RNA triphosphatase (RTPase) activity of NSP2 may account for the absence of the 5'-terminal gammaP on the (-) strands of the double-stranded RNA genome segments. This is the first report of a HIT-like protein with a multifunctional catalytic site, capable of accommodating both NTPs and RNAs during gammaP hydrolysis.