Arabidopsis thaliana CARBOXYL-TERMINAL DOMAIN (CTD) PHOSPHATASE-LIKE 1 (CPL1) regulates plant transcriptional responses to diverse stress signals. Unlike typical CTD phosphatases, CPL1 contains two double-stranded (ds) RNA binding motifs (dsRBMs) at its C-terminus. Some dsRBMs can bind to dsRNA and/or other proteins, but the function of the CPL1 dsRBMs has remained obscure. Here, we report identification of REGULATOR OF CBF GENE EXPRESSION 3 (RCF3) as a CPL1-interacting protein. RCF3 co-purified with tandem-affinity-tagged CPL1 from cultured Arabidopsis cells and contains multiple K-homology (KH) domains, which were predicted to be important for binding to single-stranded DNA/RNA. Yeast two-hybrid, luciferase complementation imaging, and bimolecular fluorescence complementation analyses established that CPL1 and RCF3 strongly associate in vivo, an interaction mediated by the dsRBM1 of CPL1 and the KH3/KH4 domains of RCF3. Mapping of functional regions of CPL1 indicated that CPL1 in vivo function requires the dsRBM1, catalytic activity, and nuclear targeting of CPL1. Gene expression profiles of rcf3 and cpl1 mutants were similar during iron deficiency, but were distinct during the cold response. These results suggest that tethering CPL1 to RCF3 via dsRBM1 is part of the mechanism that confers specificity to CPL1-mediated transcriptional regulation.