Drosophila microRNAs (miRNAs) and small interfering RNAs (siRNAs) are generally produced by different Dicer enzymes (Dcr-1 and Dcr-2) and sorted to functionally distinct Argonaute effectors (AGO1 and AGO2). However, there is cross talk between these pathways, as highlighted by the recognition that Drosophila miRNA* strands (the partner strands of mature miRNAs) are generated by Dcr-1 but are preferentially sorted to AGO2. Here, we show that a component of the siRNA loading complex, R2D2, is essential both to load endogenously encoded siRNAs (endo-siRNAs) into AGO2 and to prevent endosiRNAs from binding to AGO1. Northern blot analysis and deep sequencing showed that in the r2d2 mutant, all classes of endo-siRNAs were unable to load AGO2 and instead accumulated in the AGO1 complex. Such redirection was specific to endo-siRNAs and was not observed with miRNA* strands. We observed functional consequences of altered sorting in RNA interference (RNAi) mutants, since endosiRNAs generated from cis-natural antisense transcripts (cis-NAT-siRNA) exhibited evidence for biased maturation as single strands in AGO1 according to thermodynamic asymmetry and a hairpin-derived endo-siRNA formed cleavage-competent complexes with AGO1 upon mutation of r2d2. Finally, we demonstrated a direct role for the R2D2/Dcr-2 heterodimer in sensing central mismatch positions that direct miRNA* strands to AGO2. Together, these data reveal new roles of R2D2 in organizing small RNA networks in Drosophila.Small interfering RNAs (siRNAs) and microRNAs (miRNAs) are conserved families of small regulatory RNAs (11, 60) that operate within related molecular pathways (16,45). In both cases, cytoplasmic Dicer class RNase III enzymes metabolize double-stranded RNA (dsRNA) precursors into small RNA duplexes. These mature into single-stranded RNA associated with an Argonaute (AGO) protein in an RNA-induced silencing complex (RISC), which is guided by the small RNA to target transcripts. Animal miRNAs have an additional preceding processing step in which primary miRNA transcripts are cleaved by the nuclear RNase III enzyme Drosha, yielding ϳ60-to 70-nucleotide (nt) pre-miRNA hairpins that serve as