Mtr4 is an essential RNA helicase involved in nuclear RNA processing and degradation and is a member of the Ski2-like helicase family. Ski2-like helicases share a common core architecture that includes two RecA-like domains, a winged helix, and a helical bundle (HB) domain. In Mtr4, a short C-terminal tail immediately follows the HB domain and is positioned at the interface of the RecA-like domains. The tail ends with a SLYΦ sequence motif that is highly conserved in a subset of Ski2-like helicases. Here, we show that this sequence is critical for Mtr4 function. Mutations in the C-terminus result in decreased RNA unwinding activity. Mtr4 is a key activator of the RNA exosome complex, and mutations in the SLYΦ motif produce a slow growth phenotype when combined with a partial exosome defect in S. cerevisiae, suggesting an important role of the C-terminus of Mtr4 and the RNA exosome. We further demonstrate that C-terminal mutations impair RNA degradation activity by the major RNA exosome nuclease Rrp44 in vitro. These data demonstrate a role for the Mtr4 C-terminus in regulating helicase activity and coordinating Mtr4-exosome interactions.