RNase E is an endoribonuclease that has been studied primarily in Escherichia coli, where it is prominently involved in the processing and degradation of RNA. Homologs of bacterial RNase E are encoded in the nuclear genome of higher plants. RNA degradation in the chloroplast, an organelle that originated from a prokaryote similar to cyanobacteria, occurs via the polyadenylation-assisted degradation pathway. In E. coli, this process is probably initiated with the removal of 5'-end phosphates followed by endonucleolytic cleavage by RNase E. The plant homolog has been proposed to function in a similar way in the chloroplast. Here we show that RNase E of Arabidopsis is located in the soluble fraction of the chloroplast as a high molecular weight complex. In order to characterize its endonucleolytic activity, Arabidopsis RNase E was expressed in bacteria and analyzed. Similar to its E. coli counterpart, the endonucleolytic activity of the Arabidopsis enzyme depends on the number of phosphates at the 5' end, is inhibited by structured RNA, and preferentially cleaves A/U-rich sequences. The enzyme forms an oligomeric complex of approximately 680 kDa. The chloroplast localization and the similarity in the two enzymes' characteristics suggest that plant RNase E participates in the initial endonucleolytic cleavage of the polyadenylation-stimulated RNA degradation process in the chloroplast, perhaps in collaboration with the two other chloroplast endonucleases, RNase J and CSP41.