The endoplasmic reticulum (ER) Hsp70 chaperone BiP is regulated by AMPylation, a reversible inactivating post-translational modification. Both BiP AMPylation and deAMPylation are catalysed by a single ER-localised enzyme, FICD. Here we present crystallographic and solution structures of a deAMPylation Michaelis complex formed between mammalian AMPylated BiP and FICD. The latter, via its tetratricopeptide repeat domain, binds a surface that is specific to ATP-state Hsp70 chaperones, explaining the exquisite selectivity of FICD for BiP's ATP-bound conformation both when AMPylating and deAMPylating Thr518. The eukaryotic deAMPylation mechanism thus revealed, rationalises the role of the conserved Fic domain Glu234 as a gatekeeper residue that both inhibits AMPylation and facilitates hydrolytic deAMPylation catalysed by dimeric FICD. These findings point to a monomerisation-induced increase in Glu234 flexibility as the basis of an oligomeric state-dependent switch between FICD's antagonistic activities, despite a similar mode of engagement of its two substrates - unmodified and AMPylated BiP.