The broad cellular actions of RNase III family enzymes include ribosomal RNA ( rRNA) processing, mRNA decay, and the generation of noncoding microRNAs in both prokaryotes and eukaryotes. Here we report that YmdB, an evolutionarily conserved 18.8-kDa protein of Escherichia coli of previously unknown function, is a regulator of RNase III cleavages. We show that YmdB functions by interacting with a site in the RNase III catalytic region, that expression of YmdB is transcriptionally activated by both cold-shock stress and the entry of cells into stationary phase, and that this activation requires the sigma-factor-encoding gene, rpoS. We discovered that down-regulation of RNase III activity occurs during both stresses and is dependent on YmdB production during cold shock; in contrast, stationary-phase regulation was unperturbed in ymdB-null mutant bacteria, indicating the existence of additional, YmdB-independent, factors that dynamically regulate RNase III actions during normal cell growth. Our results reveal the previously unsuspected role of ribonuclease-binding proteins in the regulation of RNase III activity.