RNA helicases are proteins essential to almost every facet of RNA metabolism, including the gene-silencing pathways that employ small RNAs. A phylogenetically related group of helicases is required for the RNA-silencing mechanism in Caenorhabditis elegans. Dicer-related helicase 3 (DRH-3) is a Dicer-RIG-I family protein that is essential for RNA silencing and germline development in nematodes. Here we performed a biochemical characterization of the ligand binding and catalytic activities of DRH-3 in vitro. We identify signature motifs specific to this family of RNA helicases. We find that DRH-3 binds both single-stranded and double-stranded RNAs with high affinity. However, the ATPase activity of DRH-3 is stimulated only by double-stranded RNA. DRH-3 is a robust RNA-stimulated ATPase with a k(cat) value of 500/min when stimulated with short RNA duplexes. The DRH-3 ATPase may have allosteric regulation in cis that is controlled by the stoichiometry of double-stranded RNA to enzyme. We observe that the DRH-3 ATPase is stimulated only by duplexes containing RNA, suggesting a role for DRH-3 during or after transcription. Our findings provide clues to the role of DRH-3 during the RNA interference response in vivo.