Drosophila Argonaute-1 and Argonaute-2 differ in function and small RNA content. AGO2 binds to siRNAs, whereas AGO1 is almost exclusively occupied by microRNAs. MicroRNA duplexes are intrinsically asymmetric, with one strand, the miR strand, preferentially entering AGO1 to recognize and regulate the expression of target mRNAs. The other strand, miR^∗, has been viewed as a byproduct of microRNA biogenesis. Here, we show that miR^∗s are often loaded as functional species into AGO2. This indicates that each microRNA precursor can potentially produce two mature small RNA strands that are differentially sorted within the RNAi pathway. miR^∗ biogenesis depends upon the canonical microRNA pathway, but loading into AGO2 is mediated by factors traditionally dedicated to siRNAs. By inferring and validating hierarchical rules that predict differential AGO loading, we find that intrinsic determinants, including structural and thermodynamic properties of the processed duplex, regulate the fate of each RNA strand within the RNAi pathway.