Sweet potato chlorotic stunt virus (SPCSV; family Closteroviridae) encodes a Class 1 RNase III endoribonuclease (RNase3) that suppresses post-transcriptional RNA interference (RNAi) and eliminates antiviral defense in sweetpotato plants (Ipomoea batatas). For RNAi suppression, RNase3 cleaves double-stranded small interfering RNAs (ds-siRNA) and long dsRNA to fragments that are too short to be utilized in RNAi. However, RNase3 can suppress only RNAi induced by sense RNA. Sense-mediated RNAi involves host suppressor of gene silencing 3 (SGS3) and RNA-dependent RNA polymerase 6 (RDR6). In this study, subcellular localization and host interactions of RNase3 were studied in plant cells. RNase3 was found to interact with SGS3 of sweetpotato and Arabidopsis thaliana when expressed in leaves, and it localized to SGS3/RDR6 bodies in the cytoplasm of leaf cells and protoplasts. RNase3 was also detected in the nucleus. Co-expression of RNase3 and SGS3 in leaf tissue enhanced the suppression of RNAi, as compared with expression of RNase3 alone. These results suggest additional mechanisms needed for efficient RNase3-mediated suppression of RNAi and provide new information about the subcellular context and phase of the RNAi pathway in which RNase3 realizes RNAi suppression.