The major pathway of mRNA degradation in yeast occurs through deadenylation, decapping and subsequent 5' to 3' exonucleolytic decay of the transcript body. To identify proteins that control the activity of the decapping enzyme, which is encoded by the DCP1 gene, we isolated a high-copy suppressor of the temperature-sensitive dcp1-2 allele, termed DCP2. Overexpression of Dcp2p partially suppressed the dcp1-2 decapping defect. Moreover, the Dcp2 protein was required for the decapping of both normal mRNAs and aberrant transcripts that are degraded by the mRNA surveillance pathway. The Dcp2 protein contains a MutT motif, which is found in a class of pyrophosphatases. Mutational analyses indicated that the region of Dcp2p containing the MutT motif is necessary and sufficient for Dcp2p's function in mRNA decapping. The Dcp2p also coimmunoprecipitates with the DCP1 decapping enzyme and is required for the production of enzymatically active decapping enzyme. These results suggest that direct or indirect interaction of Dcp1p with Dcp2p is required for the production of active decapping enzyme, perhaps in a process requiring the hydrolysis of a pyrophosphate bond.