Bloom syndrome is an autosomal recessive disorder caused by mutations in the RecQ family helicase BLM that is associated with growth retardation and predisposition to cancer. BLM helicase has a high specificity for non-canonical G-quadruplex (G4) DNA structures, which are formed by G-rich DNA strands and play an important role in the maintenance of genomic integrity. Here we used single-molecule FRET to define the mechanism of interaction of BLM helicase with intra-stranded G4 structures. We show that the activity of BLM is substrate dependent, and highly regulated by a short-strand DNA (ssDNA) segment that separates the G4 motif from double-stranded DNA. We demonstrate cooperativity between the RQC and HRDC domains of BLM during binding and unfolding of the G4 structure, where the RQC domain interaction with G4 is stabilized by HRDC binding to ssDNA. We present a model that proposes a unique role for G4 structures in modulating the activity of DNA processing enzymes.