This is the final revised version, accepted for publication in Duke Math. J., of paper 0377 (10 Dec 1999) in this archive. In particular, an Appendix has been added.
We prove a decomposition theorem for the equivariant K-theory of actions of affine group schemes G of finite type over a field on regular separated noetherian algebraic spaces, under the hypothesis that the actions have finite geometric stabilizers and satisfy a rationality condition together with a technical condition which holds e.g. for G abelian or smooth. We describe in an Appendix various complicial bi-Waldhausen categories (in Thomason's terminology) modelling the equivariant K-theory of regular noetherian separated algebraic spaces.