The scavenger decapping enzyme Dcs1 has been shown to facilitate the activity of the cytoplasmic 5'-3' exoribonuclease Xrn1 in eukaryotes. Dcs1 has also been shown to be required for growth in glycerol medium. We therefore wondered whether the capacity to activate RNA degradation could account for its requirement for growth on this carbon source. Indeed, a catalytic mutant of Xrn1 is also unable to grow in glycerol medium, and removal of the nuclear localization signal of Rat1, the nuclear homolog of Xrn1, restores glycerol growth. A cytoplasmic 5'-3' exoribonuclease activity is therefore essential for yeast growth on glycerol, suggesting that Xrn1 activation by Dcs1 is physiologically important. In fact, Xrn1 is essentially inactive in the absence of Dcs1 in vivo. We analyzed the role of Dcs1 in the control of exoribonuclease activity in vitro and propose that Dcs1 is a specific cofactor of Xrn1. Dcs1 does not stimulate the activity of other 5'-3' exoribonucleases, such as Rat1, in vitro. We demonstrate that Dcs1 improves the apparent affinity of Xrn1 for RNA and that Xrn1 and Dcs1 can form a complex in vitro. We examined the biological significance of this regulation by performing 2D protein gel analysis. We observed that a set of proteins showing decreased levels in a DCS deletion strain, some essential for respiration, are also systematically decreased in an XRN1 deletion mutant. Therefore, we propose that the activation of Xrn1 by Dcs1 is important for respiration.