Members of the RNase III family are the primary cellular agents of dsRNA (double-stranded RNA) processing. Bacterial RNases III function as homodimers and contain two dsRBDs (dsRNA-binding domains) and two catalytic sites. The potential for functional cross-talk between the catalytic sites and the requirement for both dsRBDs for processing activity are not known. It is shown that an Escherichia coli RNase III heterodimer that contains a single functional wt (wild-type) catalytic site and an inactive catalytic site (RNase III[E117A/wt]) cleaves a substrate with a single scissile bond with a k cat value that is one-half that of wt RNase III, but exhibits an unaltered K m . Moreover, RNase III[E117A/wt] cleavage of a substrate containing two scissile bonds generates singly cleaved intermediates that are only slowly cleaved at the remaining phosphodiester linkage, and in a manner that is sensitive to excess unlabelled substrate. These results demonstrate the equal probability, during a single binding event, of placement of a scissile bond in a functional or nonfunctional catalytic site of the heterodimer and reveal a requirement for substrate dissociation and rebinding for cleavage of both phosphodiester linkages by the mutant heterodimer. The rate of phosphodiester hydrolysis by RNase III[E117A/wt] has the same dependence on Mg 2+ ion concentration as that of the wt enzyme, and exhibits a Hill coefficient ( h ) of 2.0±0.1, indicating that the metal ion dependence essentially reflects a single catalytic site that employs a two-Mg 2+ -ion mechanism. Whereas an E. coli RNase III mutant that lacks both dsRBDs is inactive, a heterodimer that contains a single dsRBD exhibits significant catalytic activity. These findings support a reaction pathway involving the largely independent action of the dsRBDs and the catalytic sites in substrate recognition and cleavage respectively.