Abstract
Argonaute proteins are required for the biogenesis of some small RNAs (sRNAs), including the PIWI-interacting RNAs and some microRNAs. How Argonautes mediate maturation of sRNAs independent of their slicer activity is not clear. The maturation of the Neurospora microRNA-like sRNA, milR-1, requires the Argonaute protein QDE-2, Dicer, and QIP. Here, we reconstitute this Argonaute-dependent sRNA biogenesis pathway in vitro and discover that the RNA exosome is also required for milR-1 production. Our results demonstrate that QDE-2 mediates milR-1 maturation by recruiting exosome and QIP and by determining the size of milR-1. The exonuclease QIP first separates the QDE-2-bound pre-milR-1 duplex and then mediates 3' to 5' trimming and maturation of pre-milRNA together with exosome using a handover mechanism. In addition, exosome is also important for the decay of sRNAs. Together, our results establish a biochemical mechanism of an Argonaute-dependent sRNA biogenesis pathway and critical roles of exosome in sRNA processing.