ZBP1 (zipcode-binding protein 1) was originally discovered as a trans-acting factor for the "zipcode" in the 3' untranslated region (UTR) of the beta-actin mRNA that is important for its localization and translational regulation. Subsequently, ZBP1 has been found to be a multifunctional regulator of RNA metabolism that controls aspects of localization, stability, and translation for many mRNAs. To reveal how ZBP1 recognizes its RNA targets, we biochemically characterized the interaction between ZBP1 and the beta-actin zipcode. The third and fourth KH (hnRNP K homology) domains of ZBP1 specifically recognize a bipartite RNA element located within the first 28 nucleotides of the zipcode. The spacing between the RNA sequences is consistent with the structure of IMP1 KH34, the human ortholog of ZBP1, that we solved by X-ray crystallography. The tandem KH domains are arranged in an intramolecular anti-parallel pseudodimer conformation with the canonical RNA-binding surfaces at opposite ends of the molecule. This orientation of the KH domains requires that the RNA backbone must undergo an approximately 180 degrees change in direction in order for both KH domains to contact the RNA simultaneously. The RNA looping induced by ZBP1 binding provides a mechanism for specific recognition and may facilitate the assembly of post-transcriptional regulatory complexes by remodeling the bound transcript.