The life of RNA polymerase II (RNAPII) transcripts is shaped by the dynamic formation of mutually exclusive ribonucleoprotein complexes (RNPs) that direct transcript biogenesis and turnover. A key regulator of RNA metabolism in the nucleus is the scaffold protein ARS2 (arsenic resistance protein 2), bound to the cap binding complex (CBC). We report here that alternative splicing of ARS2’s intron 5, generates cytoplasmic isoforms that lack 270 amino acids from the N-terminal of the protein and are functionally distinct from nuclear ARS2. Switching of ARS2 isoforms within the CBC in the cytoplasm has dramatic functional consequences, changing ARS2 from a NMD inhibitor to a NMD promoter that enhances the binding of UPF1 to NCBP1, ERF1 and DHX34, favouring SURF complex formation, SMG7 recruitment and transcript degradation. ARS2 isoform exchange is also relevant during arsenic stress, where cytoplasmic ARS2 promotes a global response to arsenic in a CBC-independent manner. We propose that ARS2 isoform switching promotes the proper recruitment of RNP complexes during NMD and the cellular response to arsenic stress. The existence of non-redundant ARS2 isoforms is relevant for cell homeostasis, stress response, and cancer treatment.