Ribonuclease III (RNase III) represents a family of double-stranded RNA (dsRNA) endonucleases. The simplest bacterial enzyme contains an endonuclease domain (endoND) and a dsRNA binding domain (dsRBD). RNase III can affect RNA structure and gene expression in either of two ways: as a dsRNA-processing enzyme that cleaves dsRNA, or as a dsRNA binding protein that binds but does not cleave dsRNA. We previously determined the endoND structure of Aquifex aeolicus RNase III (Aa-RNase III) and modeled a catalytic complex of full-length Aa-RNase III with dsRNA. Here, we present the crystal structure of Aa-RNase III in complex with dsRNA, revealing a noncatalytic assembly. The major differences between the two functional forms of RNase III.dsRNA are the conformation of the protein and the orientation and location of dsRNA. The flexibility of a 7 residue linker between the endoND and dsRBD enables the transition between these two forms.