Polycomb repressive complex 2 (PRC2) is a histone methyltransferase that is localized to thousands of mammalian genes. Though important to human disease and as a drug target, how PRC2 is recruited remains unclear. One model invokes cis-regulatory RNA. Herein, we biochemically and functionally probe PRC2's recognition of RNA using the X-inactivation model. We observe surprisingly high discriminatory capabilities. While SUZ12 and JARID2 subunits can bind RNA, EZH2 has highest affinity and is somewhat promiscuous. EED regulates the affinity of EZH2 for RNA, lending greater specificity to PRC2-RNA interactions. Intriguingly, while RNA is crucial for targeting, RNA inhibits EZH2's catalytic activity. JARID2 weakens PRC2's binding to RNA and relieves catalytic inhibition. We propose that RNA guides PRC2 to its target but inhibits its enzymatic activity until PRC2 associates with JARID2 on chromatin. Our study provides a molecular view of regulatory interactions between RNA and PRC2 at the chromatin interface.