Conformational dynamics in bilobed enzymes can be used to regulate their activity. One such enzyme, the eukaryotic decapping enzyme Dcp2, controls the half-life of mRNA by cleaving the 5' cap structure, which exposes a monophosphate that is efficiently degraded by exonucleases. Decapping by Dcp2 is thought to be controlled by an open-to-closed transition involving formation of a composite active site with two domains sandwiching substrate, but many details of this process are not understood. Here, using NMR spectroscopy and enzyme kinetics, we show that Trp43 of Schizosaccharomyces pombe Dcp2 is a conserved gatekeeper of this open-to-closed transition. We find that Dcp2 samples multiple conformations in solution on the millisecond-microsecond timescale. Mutation of the gatekeeper tryptophan abolishes the dynamic behavior of Dcp2 and attenuates coactivation by a yeast enhancer of decapping (Edc1). Our results determine the dynamics of the open-to-closed transition in Dcp2, suggest a structural pathway for coactivation, predict that Dcp1 directly contacts the catalytic domain of Dcp2, and show that coactivation of decapping by Dcp2 is linked to formation of the composite active site.