ABSTRACTMycobacterium smegmatisencodes several DNA repair polymerases that are adept at incorporating ribonucleotides, which raises questions about how ribonucleotides in DNA are sensed and removed. RNase H enzymes, of whichM. smegmatisencodes four, are strong candidates for a surveillance role. Here, we interrogate the biochemical activity and nucleic acid substrate specificity ofM. smegmatisRnhC, a bifunctional RNase H and acid phosphatase. We report that (i) the RnhC nuclease is stringently specific for RNA:DNA hybrid duplexes; (ii) RnhC does not selectively recognize and cleave DNA-RNA or RNA-DNA junctions in duplex nucleic acid; (iii) RnhC cannot incise an embedded monoribonucleotide or diribonucleotide in duplex DNA; (iv) RnhC can incise tracts of 4 or more ribonucleotides embedded in duplex DNA, leaving two or more residual ribonucleotides at the cleaved 3′-OH end and at least one or two ribonucleotides on the 5′-PO4end; (v) the RNase H activity is inherent in an autonomous 140-amino-acid (aa) N-terminal domain of RnhC; and (vi) the C-terminal 211-aa domain of RnhC is an autonomous acid phosphatase. The cleavage specificity of RnhC is clearly distinct from that ofEscherichia coliRNase H2, which selectively incises at an RNA-DNA junction. Thus, we classify RnhC as a type I RNase H. The properties of RnhC are consistent with a role in Okazaki fragment RNA primer removal or in surveillance of oligoribonucleotide tracts embedded in DNA but not in excision repair of single misincorporated ribonucleotides.IMPORTANCERNase H enzymes help cleanse the genome of ribonucleotides that are present either as ribotracts (e.g., RNA primers) or as single ribonucleotides embedded in duplex DNA.Mycobacterium smegmatisencodes four RNase H proteins, including RnhC, which is characterized in this study. The nucleic acid substrate and cleavage site specificities of RnhC are consistent with a role in initiating the removal of ribotracts but not in single-ribonucleotide surveillance. RnhC has a C-terminal acid phosphatase domain that is functionally autonomous of its N-terminal RNase H catalytic domain. RnhC homologs are prevalent inActinobacteria.