RNase P is a ubiquitous ribonuclease responsible for removing the 5’ leader of tRNA precursor. Bacterial RNase P contains one RNA (RPR) and one protein (RPP) subunit. However, the number of protein variants depends on the origin. The RNA subunit is the catalytic subunit that in vitro cleaves its substrate with and without the protein subunit. Therefore RNase P is a ribozyme. However, the protein subunit is indispensable in vivo. The objective of this thesis was to understand the mechanism of and substrate interaction in RPR-mediated cleavage, in particular the contributions of the two domains of RPR and the roles of the base at the -1 residue in the substrate. As model systems I have used bacterial (Eco) and archaeal (Pfu) RPRs. The TSL (T-stem-loop) region of a tRNA precursor and the TBS (TSL-binding site) in the RPR S-domain interact upon RPR-substrate complex conformation. A productive TSL/TBS-interaction affects events at the cleavage site by influencing the positioning of chemical groups and/ or Mg2+ such that efficient and correct cleavage occurs consistent with an induced fit mechanism. With respect to events at the cleavage site, my data show that the identity of the residue immediately upstream the 5’ of the cleavage site (at -1) plays a significant role for efficient and accurate cleavage although its presence is not essential. My data also show that the RPR C-domain can cleave without the S-domain. However, the presence of the S-domain increases the efficiency of cleavage but lowers the accuracy. The structure of the S-domain of Pfu RPR differs from that of Eco RPR and my data suggest that the Pfu S-domain does not affect the accuracy in the same way as for Eco RPR. It also appears that the proteins that bind to the Pfu S-domain play a role in formation of a productive TSL/TBS-interaction. It is therefore possible that the proteins of Pfu RNase P have evolved to take over the role of the S-domain with respect to the interaction with the TSL-region of the substrate.