Dropout is a common phenomenon in single-cell RNA-seq (scRNA-seq) data, and when left unaddressed it affects the validity of the statistical analyses. Despite this, few current methods for differential expression (DE) analysis of scRNA-seq data explicitly model the process that gives rise to the dropout events. We develop DECENT, a method for differential expression (DE) analysis of scRNA-seq data that explicitly and accurately models the molecule capture process in scRNA-seq experiments.We show that DECENT demonstrates improved DE performance over existing DE methods that do not explicitly model dropout. This improvement is consistently observed across several public scRNA-seq datasets generated using different technological platforms. The gain in improvement is especially large when the capture process is overdispersed. DECENT maintains type I error well while achieving better sensitivity. Its performance without spike-ins is almost as good as when spike-ins are used to calibrate the capture model.The method is implemented as a publicly available R package available from https://github.com/cz-ye/DECENT.Supplementary data are available at Bioinformatics online.