Escherichia coli RNase T, an RNA-processing enzyme and a member of the DEDD exonuclease superfamily, was examined using sequence analysis and site-directed mutagenesis. Like other DEDD exonucleases, RNase T was found to contain three conserved Exo motifs that included four invariant acidic residues. Mutagenesis of these motifs revealed that they are essential for RNase T activity, indicating that they probably form the RNase T catalytic center in a manner similar to that found in other DEDD exonucleases. We also identified by sequence analysis three short, but highly conserved, sequence segments rich in positively charged residues. Site-directed mutagenesis of these regions indicated that they are involved in substrate binding. Additional analysis revealed that residues within the C-terminal region of RNase T are essential for RNase T dimerization and, consequently, for RNase T activity. These data define the domains necessary for RNase T action, and together with information in the accompanying article, have led to the formulation of a detailed model for the structure and mechanism of action of RNase T.