Polynucleotide phosphorylase (PNPase) is an exoribonuclease that cleaves single-stranded RNA substrates with 3′–5′ directionality and processive behaviour. Its ring-like, trimeric architecture creates a central channel where phosphorolytic active sites reside. One face of the ring is decorated with RNA-binding K-homology (KH) and S1 domains, but exactly how these domains help to direct the 3′ end of single-stranded RNA substrates towards the active sites is an unsolved puzzle. Insight into this process is provided by our crystal structures of RNA-bound and apo Caulobacter crescentus PNPase. In the RNA-free form, the S1 domains adopt a ‘splayed’ conformation that may facilitate capture of RNA substrates. In the RNA-bound structure, the three KH domains collectively close upon the RNA and direct the 3′ end towards a constricted aperture at the entrance of the central channel. The KH domains make non-equivalent interactions with the RNA, and there is a marked asymmetry within the catalytic core of the enzyme. On the basis of these data, we propose that structural non-equivalence, induced upon RNA binding, helps to channel substrate to the active sites through mechanical ratcheting. Structural and biochemical analyses also reveal the basis for PNPase association with RNase E in the multi-enzyme RNA degradosome assembly of the α-proteobacteria.