RNase E is an essential endonuclease that is abundant in many bacteria and plays an important part in all aspects of RNA metabolism. It functions as part of a large macromolecular complex known as the RNA degradosome. Recent evidence suggests that this complex associates with the inner membrane of bacteria, an observation that challenges traditional models in which soluble RNases are proposed to randomly interact with RNAs in the cytosol. In this Review, I summarize the major roles of RNase E in RNA processing and decay and discuss the various mechanisms that regulate its activity. I also propose a new model to rationalize the mechanism of RNase E action in the context of its localization in the bacterial cell.