MicroRNAs (miRNAs) regulate expression of their target mRNAs through the RNA-induced silencing complex (RISC), which contains an Argonaute (Ago) family protein as a core component. In Drosophila melanogaster, miRNAs are generally sorted into Ago1-containing RISC (Ago1-RISC). We established a native gel system that can biochemically dissect the Ago1-RISC assembly pathway. We found that miRNA-miRNA* duplexes are loaded into Ago1 as double-stranded RNAs in an ATP-dependent fashion. In contrast, unexpectedly, unwinding of miRNA-miRNA* duplexes is a passive process that does not require ATP or slicer activity of Ago1. Central mismatches direct miRNA-miRNA* duplexes into pre-Ago1-RISC, whereas mismatches in the seed or guide strand positions 12-15 promote conversion of pre-Ago1-RISC into mature Ago1-RISC. Our findings show that unwinding of miRNAs is a precise mirror-image process of target recognition, and both processes reflect the unique geometry of RNAs in Ago proteins.