Decapping is an important process in the control of eukaryotic mRNA degradation. The scavenger decapping enzyme DcpS functions to clear the cell of cap structure following decay of the RNA body by catalyzing the hydrolysis of m(7)GpppN to m(7)Gp and ppN. Structural analysis has revealed that DcpS is a dimeric protein with a domain-swapped amino terminus. The protein dimer contains two cap binding/hydrolysis sites and displays a symmetric structure with both binding sites in the open conformation in the ligand-free state and an asymmetric conformation with one site open and one site closed in the ligand-bound state. The structural data are suggestive of a dynamic decapping mechanism where each monomer could alternate between an open and closed state. Using transient state kinetic studies, we show that both the rate-limiting step and rate of decapping are regulated by cap substrate. A regulatory mechanism is established by the intrinsic domain-swapped structure of the DcpS dimer such that the decapping reaction is very efficient at low cap substrate concentrations yet regulated with excess cap substrate. These data provide biochemical evidence to verify experimentally a dynamic and mutually exclusive cap hydrolysis activity of the two cap binding sites of DcpS and provide key insights into its regulation.