Intrinsic immune responses autonomously inhibit viral replication and spread. One pathway that restricts viral infection in plants and insects is RNA interference (RNAi), which targets and degrades viral RNA to limit infection. To identify additional genes involved in intrinsic antiviral immunity, we screened Drosophila cells for modulators of viral infection using an RNAi library. We identified Ars2 as a key component of Drosophila antiviral immunity. Loss of Ars2 in cells, or in flies, increases susceptibility to RNA viruses. Consistent with its antiviral properties, we found that Ars2 physically interacts with Dcr-2, modulates its activity in vitro, and is required for siRNA-mediated silencing. Furthermore, we show that Ars2 plays an essential role in miRNA-mediated silencing, interacting with the Microprocessor and stabilizing pri-miRNAs. The identification of Ars2 as a player in these small RNA pathways provides new insight into the biogenesis of small RNAs that may be extended to other systems.