The stability of all RNA polymerase II transcripts depends on the 5'-terminal cap structure. Removal of the cap is a prerequisite for 5' to 3'-decay and is catalyzed by distinct cellular and viral decapping activities. Over the past decade, several decapping enzymes have been characterized through functional and structural studies. An emerging theme is that function is regulated by protein interactions; however, in vitro assays to dissect the effects on enzyme activity are unavailable. Here we present a kinetic assay to monitor decapping by the heterodimeric yeast Dcp1/Dcp2 complex. Kinetic constants related to RNA binding and the rate of the catalytic step can be determined with recombinant enzyme and cap-radiolabeled RNA substrate, allowing substrate specificity and the role of activating factors to be firmly established.