Most organisms have evolved defense mechanisms to protect themselves from viruses and other pathogens. Arthropods lack the protein-based adaptive immune response found in vertebrates. Here we show that the central catalytic component of the RNA-induced silencing complex (RISC), the nuclease Argonaute 2 (Ago-2), is essential for antiviral defense in adult Drosophila melanogaster. Ago-2-defective flies are hypersensitive to infection with a major fruit fly pathogen, Drosophila C virus (DCV), and with Cricket Paralysis virus (CrPV). Increased mortality in ago-2 mutant flies was associated with a dramatic increase in viral RNA accumulation and virus titers. The physiological significance of this antiviral mechanism is underscored by our finding that DCV encodes a potent suppressor of RNA interference (RNAi). This suppressor binds long double-stranded RNA (dsRNA) and inhibits Dicer-2-mediated processing of dsRNA into short interfering RNA (siRNA), but does not bind short siRNAs or disrupt the microRNA (miRNA) pathway. Based on these results we propose that RNAi is a major antiviral immune defense mechanism in Drosophila.