The rne gene of Escherichia coli encodes a 118 kDa protein that has ribonuclease E (RNase E) activity and binds RNA. A functional rne gene product is essential for cell viability and for the processing and/or decay of a variety of RNA species, including 9 S RNA, mRNA and RNAI, the antisense RNA regulator of ColE1-type plasmid replication. By testing the ability of different segments of the Rne protein to catalyze RNA cleavage and to bind RNA, we found that the N-terminal half (residues 1 to 498) of Rne contains a catalytic function sufficient for site-specific cleavage of oligoribonucleotides and complex RNAs. The C-terminal half of the protein, which contains both an arginine-rich region (residues 597 to 684) that we show binds RNA and a segment that is essential for cell viability (residues 844 to 1061), had no detectable endoribonucleolytic activity. Our results, which map the catalytic domain of RNase E, indicate the existence of discrete functional domains within the multifaceted Rne protein.