Most polycistronic genes are expressed in a single transcript, in which each cistron produces a fixed amount of protein. In this report, we show the first example of differential degradation of a polycistronic gene induced by a small regulatory RNA (sRNA). Our data show that the iron-responsive sRNA, RyhB, binds to the second cistron of the polycistronic mRNA, iscRSUA, which encodes the necessary machinery for biosynthesis of Fe-S clusters, and promotes the cleavage of the downstream iscSUA transcript. This cleavage gives rise to the remaining 5'-section of the transcript encoding IscR, a transcriptional regulator responsible for activation and repression of several genes depending on the cellular Fe-S level. Our data indicate that the iscR transcript is stable and that translation is active. The stability of the iscR transcript depends on a 111-nucleotide long non-translated RNA section located between iscR and iscS, which forms a strong repetitive extragenic palindromic secondary structure and may protect against ribonucleases degradation. This novel regulation shows how sRNAs and mRNA structures can work together to modulate the transcriptional response to a specific stress.