CRISPR-Cas are adaptive bacterial and archaeal immune systems that utilize guide RNA (gRNA) to detect RNA or DNA targets from parasitic mobile genetic elements following an infection. Upon detecting a target nucleic acid, the Cas effector nucleases are activated to restrict infection. CRISPR-Cas systems are exquisite biotechnological platforms for nucleic acid manipulations wherein gRNA (and hence their targets) may be easily defined. Cas13 are ribonucleases (RNases) that, following gRNA-target pairing, conformationally transition to an activated state with catalytically capable Higher Eukaryotic and Prokaryotic Nucleotide-binding (HEPN) domains. Activated HEPN nucleases in Cas13 cleave both target RNA and freely diffusing ‘bystander’ RNA as substrate. In Cas13a specifically, phosphodiesters 5′ to U or A bases are most susceptible to cleavage depending on the homolog, suggesting the existence of a nucleotide-binding pocket proximal to the active site. Here, we investigate the molecular mechanisms underpinning HEPN nuclease function with a focus on bystander RNA selection, binding, and catalysis. Using a high-throughput RNA-sequencing pipeline, we probed the substrate specificity landscape of Cas13 and identified favoured RNA cut sites from a pool of total E. coli RNA. We analysed these preferred RNA substrates in terms of size, shape, and sequence using a mixture of biochemical binding and RNA cleavage assays. Finally, we describe cryo-EM structures of Cas13 binding to a preferred RNA substrate and demonstrate the importance of elements surrounding the active site for bystander RNA recruitment and nucleotide-selective phosphodiester cleavage. Overall, these insights may challenge the notion that Cas13 are purely indiscriminate RNases and provide a foundation for Cas13 enzyme or substrate RNA engineering in biotechnology.