Long double-stranded RNAs (dsRNAs) may undergo covalent modification (hyper-editing) by adenosine deaminases that act on RNA (ADARs), whereby up to 50-60% of adenosine residues are converted to inosine. Previously, we have described a ribonuclease activity in various cell extracts that specifically targets dsRNAs hyper-edited by ADARs. Such a ribonuclease may play an important role in viral defense, or may alternatively be involved in down-regulation of other RNA duplexes. Cleavage of hyper-edited dsRNA occurs within sequences containing multiple IU pairs but not in duplexes that contain either isosteric GU pairs or Watson-Crick base pairs. Here, we describe experiments aimed at further characterizing cleavage of hyper-edited dsRNA. Using various inosine-containing dsRNAs we show that cleavage occurs preferentially at a site containing both IU and UI pairs, and that inclusion of even a single GU pair inhibits cleavage. We also show that cleavage occurs on both strands within a single dsRNA molecule and requires a 2'-OH group. Strikingly, we show that ADAR1, ADAR2 or dADAR all preferentially generate the preferred cleavage site when hyper-editing a long dsRNA.