The microRNA (miRNA)-induced silencing complex (miRISC) controls gene expression by a posttranscriptional mechanism involving translational repression and/or promoting messenger RNA (mRNA) deadenylation and degradation. The GW182/TNRC6 (GW) family proteins are core components of the miRISC and are essential for miRNA function. We show that mammalian GW proteins have distinctive functions in the miRNA pathway, with GW220/TNGW1 being essential for the formation of GW/P bodies containing the miRISC. miRISC aggregation and formation of GW/P bodies sequestered and stabilized translationally repressed target mRNA. Depletion of GW220 led to the loss of GW/P bodies and destabilization of miRNA-targeted mRNA. These findings support a model in which the cellular localization of the miRISC regulates the fate of the target mRNA.