A major pathway of eukaryotic mRNA turnover initiates with deadenylation, which allows a decapping reaction leading to 5′–3′ exonucleolytic degradation. A key control point in this pathway is the decapping of the mRNA. Two proteins, Edc1 and Edc2, were genetically identified previously as enhancers of the decapping reaction. In this work, we demonstrate that Edc1p and Edc2p are RNA-binding proteins. In addition, recombinant Edc1p or Edc2p stimulates mRNA decapping in cell-free extracts or with purified decapping enzyme. These results suggest that Edc1p and Edc2p activate decapping directly by binding to the mRNA substrate and enhancing the activity of the decapping enzyme. Interestingly, edc1Δ strains show defects in utilization of glycerol as a carbon source and misregulation of several mRNAs in response to carbon-source changes. This identifies a critical role for decapping and Edc1p in alterations of gene expression in response to carbon-source changes.