We report on the observation of interactions between ultracold Rydberg atoms and ions in a Paul trap. The rate of observed inelastic collisions, which manifest themselves as charge transfer between the Rydberg atoms and ions, exceeds that of Langevin collisions for ground state atoms by about three orders of magnitude. This indicates a huge increase in interaction strength. We study the effect of the vacant Paul traps electric fields on the Rydberg excitation spectra. To quantitatively describe the exhibited shape of the ion loss spectra, we need to include the ion-induced Stark shift on the Rydberg atoms. Furthermore, we demonstrate Rydberg excitation on a dipole-forbidden transition with the aid of the electric field of a single trapped ion. Our results confirm that interactions between ultracold atoms and trapped ions can be controlled by laser coupling to Rydberg states. Adding dynamic Rydberg dressing may allow for the creation of spin-spin interactions between atoms and ions, and the elimination of collisional heating due to ionic micromotion in atom-ion mixtures.