Human NUDT16 is a member of the NUDIX hydrolase superfamily. After having been initially described as an mRNA decapping enzyme, recent studies conferred it a role as an "housecleaning" enzyme specialized in the removal of hazardous (deoxy)inosine diphosphate from the nucleotide pool. Here we present the crystal structure of human NUDT16 both in its apo-form and in complex with its product inosine monophosphate (IMP). NUDT16 appears as a dimer whose formation generates a positively charged trench to accommodate substrate-binding. Complementation of the structural data with detailed enzymatic and biophysical studies revealed the determinants of substrate recognition and particularly the importance of the substituents in position 2 and 6 on the purine ring. The affinity for the IMP product, harboring a carbonyl in position 6 on the base, compared to purine monophosphates lacking a H-bond acceptor in this position, implies a catalytic cycle whose rate is primarily regulated by the product-release step. Finally, we have also characterized a phenomenon of inhibition by the product of the reaction, IMP, which might exclude non-deleterious nucleotides from NUDT16-mediated hydrolysis regardless of their cellular concentration. Taken together, this study details structural and regulatory mechanisms explaining how substrates are selected for hydrolysis by human NUDT16.