Escherichia coli contains nine members of the CspA family. CspA and some of its homologues play critical role in cold acclimation of cells by acting as RNA chaperones, destabilizing nucleicacid secondary structures. Disruption of nucleic acid melting activity of CspE led to loss of its transcription antitermination activity and consequently its cold acclimation activity. To date, the melting activity of Csp proteins was studied using partially double-stranded model nucleic acids substrates forming stem-loop structures. Here, we studied the mechanism of nucleic acid melting by CspE. We show that CspE melts the stem region in two directions, that CspE-induced melting does not require the continuity of the substrate's loop region, and CspE can efficiently melt model substrates with single-stranded overhangs as short as 4 nt. We further show that preferential binding of CspE at the stem-loop junction site initiates melting; binding of additional CspE molecules that fully cover the single-stranded region of a melting substrate leads to complete melting of the stem.