Small interfering RNAs (siRNAs) are artificial molecules used to silence genes of interest through the RNA interference (RNAi) pathway, mediated by the endoribonuclease Dicer. Dicer-substrate small interfering RNAs (DsiRNAs) are an alternative to conventional 21-mer siRNAs, with an increased effectiveness of up to 100-fold compared to traditional 21-mer designs. DsiRNAs have a novel asymmetric design that allows them to be processed by Dicer into the desired conventional siRNAs. DsiRNAs are a useful tool for sequence-specific gene silencing, but the molecular mechanism underlying their increased efficacy is not precisely understood. In this study, to gain a deeper understanding of Dicer function in DsiRNAs, we designed nicked DsiRNAs with and without tetra-loops to target a specific mRNA sequence, established a Dicer knockout in the HCT116 cell line, and analyzed the efficacy of various DsiRNAs on RNAi-mediated gene silencing activity. The gene silencing activity of all DsiRNAs was reduced in Dicer knockout cells. We demonstrated that tetra-looped DsiRNAs exhibited increased efficacy for gene silencing, which was mediated by Dicer protein. Thus, this study improves our understanding of Dicer function, a key component of RNAi silencing, which will inform RNAi research and applications.