In metazoa, regulation of the phosphorylation state of UPF1 is crucial for nonsense-mediated mRNA decay (NMD), a process by which aberrant mRNAs containing nonsense mutations are degraded. UPF1 is targeted for dephosphorylation by three related proteins, SMG5, SMG6, and SMG7. We report here the crystal structure of the N-terminal domain of SMG7. The structure reveals that SMG7 contains a 14-3-3-like domain. Residues that bind phosphoserine-containing peptides in 14-3-3 are conserved at the equivalent positions in SMG7. Mutation of these residues impairs UPF1 binding to SMG7 in vitro and UPF1 recruitment to cytoplasmic mRNA decay foci in vivo, suggesting that SMG7 acts as an adaptor in targeting mRNAs associated with phosphorylated UPF1 for degradation. The 14-3-3 site of SMG7 is conserved in SMG5 and SMG6. These data also imply that the homologous human Est1 might have a 14-3-3 function at telomeres, and that phosphorylation events may be important for telomerase regulation.