PARN, a poly(A)-specific ribonuclease, binds the 5' cap-structure of mRNA and initiates deadenylation-dependent decay. Eukaryotic initiation factor 4E (eIF4E) also binds to the cap structure, an interaction that is critical for initiating cap-dependent translation. The stability of various mRNA transcripts in human cell lines is reduced under conditions of serum starvation as determined by both functional and chemical half-lives. Serum starvation also leads to enhanced cap association by PARN. In contrast, the 5' cap occupancy by eIF4E decreases under serum-deprivation, as does the translation of reporter transcripts. Further, we show that PARN is a phosphoprotein and that this modification can be modulated by serum status. Taken together, these data are consistent with a natural competition existing at the 5' cap structure between PARN and eIF4E that may be regulated by changes in post-translational modifications. These phosphorylation-induced changes in the interplay of PARN and eIF4E may determine whether the mRNA is translated or decayed.