The Argonaute proteins are highly conserved throughout evolution. They associate with diverse classes of small RNAs to mediate gene silencing in developmental programs and participate in defense responses to viruses, transposons, and cellular stress. Vertebrate genomes encode four argonaute clade proteins. In mice, Argonaute2 (AGO2) is essential for embryogenesis, oogenesis and hematopoiesis. The developmental functions of the remaining Argonaute family members, AGO1, AGO3, and AGO4, remain elusive. My thesis work focuses on exploring the function of all four Argonaute proteins during animal development. Intriguingly, individual deletions of Ago1, Ago3, and Ago4, or deficiency of all three Argonautes had no apparent impact on normal mouse development or fertility. However, we demonstrate that Ago1 and Ago3 may play a role in viral defense. We found that the specialized function of Ago2 in the extraembryonic lineage can, in part, explain its unique requirement during normal development. In addition, AGO2 is the only family member retaining its nucleolytic activity. This enzymatic activity of Argonautes is deeply conserved, despite its having no obvious role in miRNA directed gene silencing. To investigate the evolutionary pressure to conserve Argonaute enzymatic activity, we engineered a mouse with catalytically inactive Ago2 alleles. Homozygous mutants died shortly after birth with an obvious anemia. Examination of microRNAs and their potential targets revealed a loss of miR-451, a small RNA important for erythropoiesis. Though this microRNA is processed by Drosha, its maturation does not require Dicer. Instead, the pre-miRNA becomes loaded into AGO2 and is cleaved by the AGO2 catalytic center to generate an intermediate 3' end, which is then further trimmed. We demonstrate that this novel AGO2-mediated miRNA biogenesis pathway can be exploited to engineer artificial silencing molecules by mimicking the precursor RNA structure of miR-451. These findings link the conservation of Argonaute catalysis to a conserved mechanism of microRNA biogenesis that is important for vertebrate development. Future studies using the Argonaute genetic models will help us define the biological mechanisms that dictated Argonaute gene family conservation.