Alternative splicing (AS) of precursor mRNA (pre-mRNA) is a cellular post-transcriptional process that generates protein isoform diversity. Nonsense-mediated RNA decay (NMD) is an mRNA surveillance pathway that recognizes and selectively degrades transcripts containing premature translation-termination codons (PTCs), thereby preventing the production of truncated proteins. Nevertheless, NMD also fine-tunes the gene expression of physiological mRNAs encoding full-length proteins. Interestingly, around one third of all AS events results in PTC-containing transcripts that undergo NMD. Numerous studies have reported a coordinated action between AS and NMD, in order to regulate the expression of several genes, especially those coding for RNA-binding proteins (RBPs). This coupling of AS to NMD (AS-NMD) is considered a gene expression tool that controls the ratio of productive to unproductive mRNA isoforms, ultimately degrading PTC-containing non-functional mRNAs. In this review, we focus on the mechanisms underlying AS-NMD, and how this regulatory process is able to control the homeostatic expression of numerous RBPs, including splicing factors, through auto- and cross-regulatory feedback loops. Furthermore, we discuss the importance of AS-NMD in the regulation of biological processes, such as cell differentiation. Finally, we analyze interesting recent data on the relevance of AS-NMD to human health, covering its potential roles in cancer and other disorders.