The bacterial Lsm protein, host factor I (Hfq), is an RNA chaperone involved in many types of RNA transactions such as replication and stability, control of small RNA activity and polyadenylation. In this latter case, Hfq stimulates poly(A) synthesis and binds poly(A) tails that it protects from exonucleolytic degradation. We show here, that there is a correlation between Hfq binding to the 3' end of an RNA molecule and its ability to stimulate RNA elongation catalyzed by poly(A)polymerase I. In contrast, formation of the Hfq-RNA complex inhibits elongation of the RNA by polynucleotide phosphorylase. We demonstrate also that Hfq binding is not affected by the phosphorylation status of the RNA molecule and occurs equally well at terminal or internal stretches of poly(A).