The emerging disease SARS is caused by a novel coronavirus that encodes several unusual RNA-processing enzymes, including non-structural protein 15 (Nsp15), a hexameric endoribonuclease that preferentially cleaves at uridine residues. How Nsp15 recognizes and cleaves RNA is not well understood and is the subject of this study. Based on the analysis of RNA products separated by denaturing gel electrophoresis, Nsp15 has been reported to cleave both 5' and 3' of the uridine. We used several RNAs, including some with nucleotide analogs, and mass spectrometry to determine that Nsp15 cleaves only 3' of the recognition uridylate, with some cleavage 3' of cytidylate. A highly conserved RNA structure in the 3' non-translated region of the SARS virus was cleaved preferentially at one of the unpaired uridylate bases, demonstrating that both RNA structure and base-pairing can affect cleavage by Nsp15. Several modified RNAs that are not cleaved by Nsp15 can bind Nsp15 as competitive inhibitors. The RNA binding affinity of Nsp15 increased with the content of uridylate in substrate RNA and the co-factor Mn(2+). The hexameric form of Nsp15 was found to bind RNA in solution. A two-dimensional crystal of Nsp15 in complex with RNA showed that at least two RNA molecules could be bound per hexamer. Furthermore, an 8.3 A structure of Nsp15 was developed using cyroelectron microscopy, allowing us to generate a model of the Nsp15-RNA complex.