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We demonstrate anisotropic etching of single-layer graphene by thermally activated nickel nanoparticles. Using this technique, we obtain sub-10-nm nanoribbons and other graphene nanostructures with edges aligned along a single crystallographic direction. We observe a new catalytic channeling behavior, whereby etched cuts do not intersect, resulting in continuously connected geometries. Raman spectroscopy and electronic measurements show that the quality of the graphene is resilient under the etching conditions, indicating that this method may serve as a powerful technique to produce graphene nanocircuits with well-defined crystallographic edges.