Because of the increasing energy consumption in radio access networks, a new radio access network called Cloud radio access network (C-RAN) has attracted increasing attention. In C-RAN, the distributed radio remote units (RRUs) are located in different sites and the placement of RRUs will influence the system performance. However, few researches investigate the optimal RRU placement from the perspective of energy efficiency, which is one of the most important characteristics of C-RAN. In this paper, we first derive the energy efficiency of C-RAN to achieve certain QoS requirements considering the circuitry energy consumption. Then, we obtain the optimal placement of RRUs by minimizing the consumed energy per bit. Numerical results are also presented to validate the analysis. Copyright © 2012 John Wiley & Sons, Ltd.