In many organisms, introducing double-stranded RNA (dsRNA) causes the degradation of messenger RNA that is homologous to the trigger dsRNA--a process known as RNA interference. The dsRNA is cleaved into short interfering RNAs (siRNAs), which hybridize to homologous mRNAs and induce their degradation. dsRNAs vary in their ability to trigger RNA interference: many mRNA-targeting dsRNAs show weak phenotypes, and nearly all mRNAs of the Caenorhabditis elegans nervous system are refractory to RNA interference. C. elegans eri-1 was identified in a genetic screen for mutants with enhanced sensitivity to dsRNAs. Here we show that eri-1 encodes an evolutionarily conserved protein with domains homologous to nucleic-acid-binding and exonuclease proteins. After exposure to dsRNA or siRNAs, animals with eri-1 mutations accumulate more siRNAs than do wild-type animals. C. elegans ERI-1 and its human orthologue degrade siRNAs in vitro. In the nematode worm, ERI-1 is predominantly cytoplasmic and is expressed most highly in the gonad and a subset of neurons, suggesting that ERI-1 siRNase activity suppresses RNA interference more intensely in these tissues. Thus, ERI-1 is a negative regulator that may normally function to limit the duration, cell-type specificity or endogenous functions of RNA interference.