Required for RNA-mediated gene silencing (RNAi). Binds to short RNAs such as microRNAs (miRNAs) or short interfering RNAs (siRNAs), and represses the translation of mRNAs which are complementary to them. Lacks endonuclease activity and does not appear to cleave target mRNAs. Also required for transcriptional gene silencing (TGS) of promoter regions which are complementary to bound short antigene RNAs (agRNAs).