RNase A catalyzes RNA cleavage through a two-step mechanism involving transphosphorylation and hydrolysis. In the first step, the enzyme facilitates the nucleophilic attack of the 2'-hydroxyl group on the adjacent phosphate, forming a cyclic 2',3'-phosphodiester intermediate. In the second step, water molecules hydrolyze this intermediate, resulting in the cleavage of the RNA strand and the release of nucleotide products.