microRNAs (miRNAs) regulate target gene expression through their ARGONAUTE (AGO) effector protein, mainly AGO1 in Arabidopsis thaliana. In addition to the highly conserved N, PAZ, MID and PIWI domains with known roles in RNA silencing, AGO1 contains a long, unstructured N-terminal extension (NTE) of little-known function. Here, we show that the NTE is indispensable for the functions of Arabidopsis AGO1, as a lack of the NTE leads to seedling lethality. Within the NTE, the region containing amino acids (a.a.) 91 to 189 is essential for rescuing an ago1 null mutant. Through global analyses of small RNAs, AGO1-associated small RNAs, and miRNA target gene expression, we show that the region containing a.a. 91–189 is required for the loading of miRNAs into AGO1. Moreover, we show that reduced nuclear partitioning of AGO1 did not affect its profiles of miRNA and ta-siRNA association. Furthermore, we show that the 1-to-90a.a. and 91-to-189a.a. regions of the NTE redundantly promote the activities of AGO1 in the biogenesis of trans-acting siRNAs. Together, we report novel roles of the NTE of Arabidopsis AGO1.