Dicer recognizes the 5' end of RNA for efficient and accurate processing.

A hallmark of RNA silencing is a class of approximately 22-nucleotide RNAs that are processed from double-stranded RNA precursors by Dicer. Accurate processing by Dicer is crucial for the functionality of microRNAs (miRNAs). The current model posits that Dicer selects cleavage sites by measuring a set distance from the 3' overhang of the double-stranded RNA terminus. Here we report that human Dicer anchors not only the 3' end but also the 5' end, with the cleavage site determined mainly by the distance (∼22 nucleotides) from the 5' end (5' counting rule). This cleavage requires a 5'-terminal phosphate group. Further, we identify a novel basic motif (5' pocket) in human Dicer that recognizes the 5'-phosphorylated end. The 5' counting rule and the 5' anchoring residues are conserved in Drosophila Dicer-1, but not in Giardia Dicer. Mutations in the 5' pocket reduce processing efficiency and alter cleavage sites in vitro. Consistently, miRNA biogenesis is perturbed in vivo when Dicer-null embryonic stem cells are replenished with the 5'-pocket mutant. Thus, 5'-end recognition by Dicer is important for precise and effective biogenesis of miRNAs. Insights from this study should also afford practical benefits to the design of small hairpin RNAs.