In mycobacteria, transcriptional activator PafBC is responsible for upregulating the majority of genes induced by DNA damage. Understanding the mechanism of PafBC activation is impeded by a lack of structural information on this transcription factor that contains a widespread, but poorly understood WYL domain frequently encountered in bacterial transcription factors. Here, we determine the crystal structure of Arthrobacter aurescens PafBC. The protein consists of two modules, each harboring an N-terminal helix-turn-helix DNA-binding domain followed by a central WYL and a C-terminal extension (WCX) domain. The WYL domains exhibit Sm-folds, while the WCX domains adopt ferredoxin-like folds, both characteristic for RNA-binding proteins. Our results suggest a mechanism of regulation in which WYL domain-containing transcription factors may be activated by binding RNA or other nucleic acid molecules. Using an in vivo mutational screen in Mycobacterium smegmatis, we identify potential co-activator binding sites on PafBC.