The endonuclease Argonaute2 (Ago2) mediates the degradation of the target mRNA within the RNA-induced silencing complex. We determined the binding and cleavage properties of recombinant human Ago2. Human Ago2 was unable to cleave preformed RNA duplexes and exhibited weaker binding affinity for RNA duplexes compared with the single strand RNA. The enzyme exhibited greater RNase H activity in the presence of Mn2+ compared with Mg2+. Human Ago2 exhibited weaker binding affinities and reduced cleavage activities for antisense RNAs with either a 5'-terminal hydroxyl or abasic nucleotide. Binding kinetics suggest that the 5'-terminal heterocycle base nucleates the interaction between the enzyme and the antisense RNA, and the 5'-phosphate stabilizes the interaction. Mn2+ ameliorated the effects of the 5'-terminal hydroxyl or abasic nucleotide on Ago2 cleavage activity and binding affinity. Nucleotide substitutions at the 3' terminus of the antisense RNA had no effect on human Ago2 cleavage activity, whereas 2'-methoxyethyl substitutions at position 2 reduced binding and cleavage activity and 12-14 reduced the cleavage activity. RNase protection assays indicated that human Ago2 interacts with the first 14 nucleotides at the 5'-pole of the antisense RNA. Human Ago2 preloaded with the antisense RNA exhibited greater binding affinities for longer sense RNAs suggesting that the enzyme interacts with regions in the sense RNA outside the site for antisense hybridization. Finally, transiently expressed human Ago2 immunoprecipitated from HeLa cells contained the double strand RNA-binding protein human immunodeficiency virus, type 1, trans-activating response RNA-binding protein, and deletion mutants of Ago2 showed that trans-activating response RNA-binding protein interacts with the PIWI domain of the enzyme.