The iron-responsive element-binding protein (IRE-BP) is an RNA-binding protein that regulates the expression of several mRNAs in response to availability of cellular iron. The iron-dependent control of IRE-BP activity has been reconstituted in vitro. Incubation of purified IRE-BP with iron salts in the presence of the reducing agent cysteine decreases IRE-BP binding to the cognate RNA element. The specificity of this effect is established by several parameters: (i) the interaction of the spliceosomal protein U1A with its U1 small nuclear RNA target sequence as an internal control is unaffected by iron perturbations, (ii) non-iron metals fail to mimic the iron effect, and (iii) iron chelator activates the IRE-binding activity of IRE-BP and titrates the effect of iron salts. Modulation of IRE-BP activity by chelatable iron is reversible and thus does not involve permanent alterations of the integrity of the protein. These findings accurately mirror the physiological basis for iron regulation of transferrin receptor mRNA stability as well as ferritin and erythroid 5-aminolevulinate synthase mRNA translation in vivo. We discuss these data vis-a-vis the structural homology of IRE-BP with the iron-sulfur protein aconitase and propose a mechanism by which the same cytoplasmic protein serves a dual function as an RNA-binding factor and an enzyme.