The study of the interactions of drug molecules with genetic materials plays a key role underlying the development of new drugs for many life-threatening diseases in pharmaceutical industries. Understanding their fundamental base-specific and/or groove-binding interaction is crucial to target the genetic material with an external drug, which can pave the way to curing diseases related to the genetic material. Here, we studied the interaction of cryptolepine hydrate (CRYP) with RNA under physiological conditions knowing the antimalarial and anticancer activities of the drug. Our experiments explicitly demonstrate that CRYP interacts with the guanine- and adenine-rich region within the RNA duplex. The pivotal role of the hydrophobic interaction governing the interaction is substantiated by temperature-dependent isothermal titration calorimetry experiments and spectroscopic studies. Circular dichroism study underpins a principally intercalative mode of binding of CRYP with RNA. This interaction is found to be drastically affected in the presence of magnesium salt, which has a strong propensity to coordinate with RNA nucleobases, which can in turn modulate the interaction of the drug with RNA. The temperature-dependent calorimetric results substantiate the occurrence of entropy-enthalpy compensation, which enabled us to rule out the possibility of groove binding of the drug with RNA. Furthermore, our results also show the application of host-guest chemistry in sequestering the RNA-bound drug, which is crucial to the development of safer therapeutic applications.