The 10-subunit RNA exosome is involved in a large number of diverse RNA processing and degradation events in eukaryotes. These reactions are carried out by the single catalytic subunit, Rrp44p/Dis3p, which is composed of three parts that are conserved throughout eukaryotes. The exosome is named for the 3' to 5' exoribonuclease activity provided by a large C-terminal region of the Rrp44p subunit that resembles other exoribonucleases. Rrp44p also contains an endoribonuclease domain. Finally, the very N-terminus of Rrp44p contains three Cys residues (CR3 motif) that are conserved in many eukaryotes but have no known function. These three conserved Cys residues cluster with a previously unrecognized conserved His residue in what resembles a metal-ion-binding site. Genetic and biochemical data show that this CR3 motif affects both endo- and exonuclease activity in vivo and both the nuclear and cytoplasmic exosome, as well as the ability of Rrp44p to associate with the other exosome subunits. These data provide the first direct evidence that the exosome-Rrp44p interaction is functionally important and also provides a molecular explanation for the functional defects when the conserved Cys residues are mutated.