RNA interference (RNAi) is widely used to silence genes in plants and animals. It operates through the degradation of target mRNA by endonuclease complexes guided by approximately 21 nucleotide (nt) short interfering RNAs (siRNAs). A similar process regulates the expression of some developmental genes through approximately 21 nt microRNAs. Plants have four types of Dicer-like (DCL) enzyme, each producing small RNAs with different functions. Here, we show that DCL2, DCL3 and DCL4 in Arabidopsis process both replicating viral RNAs and RNAi-inducing hairpin RNAs (hpRNAs) into 22-, 24- and 21 nt siRNAs, respectively, and that loss of both DCL2 and DCL4 activities is required to negate RNAi and to release the plant's repression of viral replication. We also show that hpRNAs, similar to viral infection, can engender long-distance silencing signals and that hpRNA-induced silencing is suppressed by the expression of a virus-derived suppressor protein. These findings indicate that hpRNA-mediated RNAi in plants operates through the viral defence pathway.