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Abstract Background Understanding the RNA processing of an organism’s transcriptome is an essential but challenging step in understanding its biology. Here we investigate with unprecedented detail the transcriptome of Pseudomonas aeruginosa PAO1, a medically important and innately multi-drug resistant bacterium. We systematically mapped RNA cleavage and dephosphorylation sites that result in 5′-monophosphate terminated RNA (pRNA) using monophosphate RNA-Seq (pRNA-Seq). Transcriptional start sites (TSS) were also mapped using differential RNA-Seq (dRNA-Seq) and both datasets were compared to conventional RNA-Seq performed in a variety of growth conditions. Results The pRNA-Seq library revealed known tRNA, rRNA and transfer-messenger RNA (tmRNA) processing sites, together with previously uncharacterized RNA cleavage events that were found disproportionately near the 5′ ends of transcripts associated with basic bacterial functions such as oxidative phosphorylation and purine metabolism. The majority (97%) of the processed mRNAs were cleaved at precise codon positions within defined sequence motifs indicative of distinct endonucleolytic activities. The most abundant of these motifs corresponded closely to an E. coli RNase E site previously established in vitro. Using the dRNA-Seq library, we performed an operon analysis and predicted 3159 potential TSS. A correlation analysis uncovered 105 antiparallel pairs of TSS that were separated by 18 bp from each other and were centered on single palindromic TAT(A/T)ATA motifs (likely − 10 promoter elements), suggesting that, consistent with previous in vitro experimentation, these sites can initiate transcription bi-directionally and may thus provide a novel form of transcriptional regulation. TSS and RNA-Seq analysis allowed us to confirm expression of small non-coding RNAs (ncRNAs), many of which are differentially expressed in swarming and biofilm formation conditions. Conclusions This study uses pRNA-Seq, a method that provides a genome-wide survey of RNA processing, to study the bacterium Pseudomonas aeruginosa and discover extensive transcript processing not previously appreciated. We have also gained novel insight into RNA maturation and turnover as well as a potential novel form of transcription regulation. NOTE: All sequence data has been submitted to the NCBI sequence read archive. Accession numbers are as follows: [NCBI sequence read archive: SRX156386, SRX157659, SRX157660, SRX157661, SRX157683 and SRX158075]. The sequence data is viewable using Jbrowse on www.pseudomonas.com.