Functional small RNAs are generated from select miRNA hairpin loops in flies and mammals.

In the canonical animal microRNA (miRNA) pathway, Drosha generates ∼60- to 70-nucleotide pre-miRNA hairpins that are cleaved by Dicer into small RNA duplexes that load into Argonaute proteins, which retain a single mature strand in the active complex. The terminal loops of some miRNA hairpins regulate processing efficiency, but once liberated by Dicer, they are generally considered nonfunctional by-products. Here, we show that specific miRNA loops accumulate in effector Argonaute complexes in Drosophila and mediate miRNA-type repression. This was unexpected, since endogenous loading of Argonaute proteins was believed to occur exclusively via small RNA duplexes. Using in vitro assays, which recapitulate Argonaute-specific loop loading from synthetic pre-miRNAs and even single-stranded oligoribonucleotides corresponding to miRNA loops, we reveal that the loop-loading mechanism is distinct from duplex loading. We also show that miRNA loops loaded into the miRNA effector AGO1 are subject to 3' resection, and structure-function analyses indicate selectivity of loop loading. Finally, we demonstrate that select miRNA loops in mammals are similarly loaded into Argonaute complexes and direct target repression. Altogether, we reveal a conserved mechanism that yields functional RNAs from miRNA loop regions, broadening the repertoire of Argonaute-dependent regulatory RNAs and providing evidence for functionality of endogenous ssRNA species.