Escherichia coli RNase T, the enzyme responsible for the end-turnover of tRNA and for the 3' maturation of 5 S and 23 S rRNAs and many other small, stable RNAs, was examined in detail with respect to its substrate specificity. The enzyme was found to be a single-strand-specific exoribonuclease that acts in the 3' to 5' direction in a non-processive manner. However, although other Escherichia coli exoribonucleases stop several nucleotides downstream of an RNA duplex, RNase T can digest RNA up to the first base pair. The presence of a free 3'-hydroxyl group is required for the enzyme to initiate digestion. Studies with RNA homopolymers and a variety of oligoribonucleotides revealed that RNase T displays an unusual base specificity, discriminating against pyrimidine and, particularly, C residues. Although RNase T appears to bind up to 10 nucleotides in its active site, its specificity is defined largely by the last 4 residues. A single 3'-terminal C residue can reduce RNase T action by >100-fold, and 2-terminal C residues essentially stop the enzyme. In vivo, the substrates of RNase T are similar in that they all contain a double-stranded stem followed by a single-stranded 3' overhang; yet, the action of RNase T on these substrates differs. The substrate specificity described here helps to explain why the different substrates yield different products, and why certain RNA molecules are not substrates at all.