Huntington's disease is an incurable neurodegenerative disorder caused by expansion of a CAG trinucleotide repeat within one allele of the huntingtin (HTT) gene. Agents that block expression of mutant HTT and preserve expression of wild-type HTT target the cause of the disease and are an alternative for therapy. We have previously demonstrated that mismatch-containing duplex RNAs complementary to the expanded trinucleotide repeat are potent and allele-selective inhibitors of mutant HTT expression, but the mechanism of allele selectivity was not explored. We now report that anti-CAG duplex RNA preferentially recruits argonaute 2 (AGO2) to mutant rather than wild-type HTT mRNA. Efficient inhibition of mutant HTT protein expression requires less AGO2 than needed for inhibiting wild-type expression. In contrast, inhibiting the expression of mutant HTT protein is highly sensitive to reduced expression of GW182 (TNRC6A) and its two paralogs, a protein family associated with miRNA action. Allele-selective inhibition may involve cooperative binding of multiple protein-RNA complexes to the expanded repeat. These data suggest that allele-selective inhibition proceeds through an RNA interference pathway similar to that used by miRNAs and that discrimination between mutant and wild-type alleles of HTT mRNA is highly sensitive to the pool of AGO2 and GW182 family proteins inside cells.