Gene silencing mediated by RNA interference requires the sequence-specific recognition of target mRNA by the endonuclease Argonaute, the primary enzymatic component of the RNA-induced silencing complex. We report the crystal structure of Aquifex aeolicus Argonaute, refined at 3.2A resolution. Relative to recent Argonaute structures, a 24 degrees reorientation of the PAZ domain in our structure opens a basic cleft between the N-terminal and PAZ domains, exposing the guide strand binding pocket of PAZ. This rearrangement leads to a branched, Y-shaped system of grooves that extends through the molecule and merges in a central channel containing the catalytic residues. A 5.5-ns molecular dynamics simulation of Argonaute shows a strong tendency of the PAZ and N-terminal domains to be mobile. Binding of single-stranded DNA to Argonaute monitored by total internal reflection fluorescence spectroscopy shows biphasic kinetics, also indicative of domain rearrangement upon DNA binding. Conformational rearrangement of the PAZ domain may therefore be critical for the catalytic cycle of Argonaute and the RNA-induced silencing complex.