Eukaryotic translation initiation is a highly regulated process in protein synthesis. The principal translation initiation factor eIF4AI displays helicase activity, unwinding secondary structures in the mRNAs 5′-UTR. Single molecule fluorescence resonance energy transfer (sm-FRET) is applied here to directly observe and quantify the helicase activity of eIF4AI in the presence of the ancillary RNA-binding factor eIF4H. Results show that eIF4H can significantly enhance the helicase activity of eIF4AI by strongly binding both to loop structures within the RNA transcript as well as to eIF4AI. In the presence of ATP, the eIF4AI/eIF4H complex exhibits persistent rapid and repetitive cycles of unwinding and re-annealing. ATP titration assays suggest that this process consumes a single ATP molecule per cycle. In contrast, helicase unwinding activity does not occur in the presence of the non-hydrolysable analog ATP-γS. Based on our sm-FRET results, we propose an unwinding mechanism where eIF4AI/eIF4H can bind directly to loop structures to destabilize duplexes. Since eIF4AI is the prototypical example of a DEA(D/H)-box RNA helicase, it is highly likely that this unwinding mechanism is applicable to a myriad of DEAD-box helicases employed in RNA metabolism.