The AU-rich element (ARE)-mediated mRNA-degradation activity of the RNA binding K-homology splicing regulator protein (KSRP) is regulated by phosphorylation of a serine within its N-terminal KH domain (KH1). In the cell, phosphorylation promotes the interaction of KSRP and 14-3-3zeta protein and impairs the ability of KSRP to promote the degradation of its RNA targets. Here we examine the molecular details of this mechanism. We report that phosphorylation leads to the unfolding of the structurally atypical and unstable KH1, creating a site for 14-3-3zeta binding. Using this site, 14-3-3zeta discriminates between phosphorylated and unphosphorylated KH1, driving the nuclear localization of KSRP. 14-3-3zeta -KH1 interaction regulates the mRNA-decay activity of KSRP by sequestering the protein in a separate functional pool. This study demonstrates how an mRNA-degradation pathway is connected to extracellular signaling networks through the reversible unfolding of a protein domain.