DCL1 is the ribonuclease that carries out miRNA biogenesis in plants. The enzyme has two tandem double stranded RNA binding domains (dsRBDs) in its C-terminus. Here we show that the first of these domains binds precursor RNA fragments when isolated and cooperates with the second domain in the recognition of substrate RNA. Remarkably, despite showing RNA binding activity, this domain is intrinsically disordered. We found that it acquires a folded conformation when bound to its substrate, being the first report of a complete dsRBD folding upon binding. The free unfolded form shows tendency to adopt folded conformations, and goes through an unfolded bound state prior to the folding event. The significance of these results is discussed by comparison with the behavior of other dsRBDs.