Polynucleotide phosphorylase (PNPase), an enzyme conserved in bacteria and eukaryotic organelles, processively catalyzes the phosphorolysis of RNA, releasing nucleotide diphosphates, and the reverse polymerization reaction. In Escherichia coli, both reactions are implicated in RNA decay, as addition of either poly(A) or heteropolymeric tails targets RNA to degradation. PNPase may also be associated with the RNA degradosome, a heteromultimeric protein machine that can degrade highly structured RNA. Here, we report that ATP binds to PNPase and allosterically inhibits both its phosphorolytic and polymerization activities. Our data suggest that PNPase-dependent RNA tailing and degradation occur mainly at low ATP concentrations, whereas other enzymes may play a more significant role at high energy charge. These findings connect RNA turnover with the energy charge of the cell and highlight unforeseen metabolic roles of PNPase.