The cotranslational incorporation of the unusual amino acid selenocysteine (Sec) into both prokaryotic and eukaryotic proteins requires the recoding of a UGA stop codon as one specific for Sec. The recognition of UGA as Sec in mammalian selenoproteins requires a Sec insertion sequence (SECIS) element in the 3' untranslated region as well as the SECIS binding protein SBP2. Here we report a detailed analysis of SBP2 structure and function using truncation and site-directed mutagenesis. We have localized the RNA binding domain to a conserved region shared with several ribosomal proteins and eukaryotic translation termination release factor 1. We also identified a separate and novel functional domain N-terminal to the RNA binding domain which was required for Sec insertion but not for SECIS binding. Conversely, we showed that the RNA binding domain was necessary but not sufficient for Sec insertion and that the conserved glycine residue within this domain was required for SECIS binding. Using glycerol gradient sedimentation, we found that SBP2 was stably associated with the ribosomal fraction of cell lysates and that this interaction was not dependent on its SECIS binding activity. This interaction also occurred with purified components in vitro, and we present data which suggest that the SBP2-ribosome interaction occurs via 28S rRNA. SBP2 may, therefore, have a distinct function in selecting the ribosomes to be used for Sec insertion.