Human Dicer contains two RNase III domains (RNase IIIa and RNase IIIb) that are responsible for the production of short interfering RNAs and microRNAs. These small RNAs induce gene silencing known as RNA interference. Here, we report the crystal structure of the C-terminal RNase III domain (RNase IIIb) of human Dicer at 2.0 A resolution. The structure revealed that the RNase IIIb domain can form a tightly associated homodimer, which is similar to the dimers of the bacterial RNase III domains and the two RNase III domains of Giardia Dicer. Biochemical analysis showed that the RNase IIIb homodimer can cleave double-stranded RNAs (dsRNAs), and generate short dsRNAs with 2 nt 3' overhang, which is characteristic of RNase III products. The RNase IIIb domain contained two magnesium ions per monomer around the active site. The distance between two Mg-1 ions is approximately 20.6 A, almost identical with those observed in bacterial RNase III enzymes and Giardia Dicer, while the locations of two Mg-2 ions were not conserved at all. We presume that Mg-1 ions act as catalysts for dsRNA cleavage, while Mg-2 ions are involved in RNA binding.