RPS3, a universal core component of the 40S ribosomal subunit, interacts with mRNA at the entry channel. Whether RPS3 mRNA-binding contributes to specific mRNA translation and ribosome specialization in mammalian cells is unknown. Here we mutated RPS3 mRNA-contacting residues R116, R146 and K148 and report their impact on cellular and viral translation. R116D weakened cap-proximal initiation and promoted leaky scanning, while R146D had the opposite effect. Additionally, R146D and K148D displayed contrasting effects on start-codon fidelity. Translatome analysis uncovered common differentially translated genes of which the downregulated set bears long 5'UTR and weak AUG context, suggesting a stabilizing role during scanning and AUG selection. We identified an RPS3-dependent regulatory sequence (RPS3RS) in the sub-genomic 5'UTR of SARS-CoV-2 consisting of a CUG initiation codon and a downstream element that is also the viral transcription regulatory sequence (TRS). Furthermore, RPS3 mRNA-binding residues are essential for SARS-CoV-2 NSP1-mediated inhibition of host translation and for its ribosomal binding. Intriguingly, NSP1-induced mRNA degradation was also reduced in R116D cells, indicating that mRNA decay occurs in the ribosome context. Thus, RPS3 mRNA-binding residues have multiple translation regulatory functions and are exploited by SARS-CoV-2 in various ways to influence host and viral mRNA translation and stability.