The RNA interference (RNAi) pathway was recently expanded by the discovery of multiple alternative pathways for processing of natural microRNA (miRNA) and man-made short hairpin RNA (shRNA) molecules. One non-canonical pathway bypasses Dicer cleavage and requires instead processing by Argonaute2 (Ago2), which also executes the subsequent silencing step. We named these molecules AgoshRNA, which generate only a single active RNA strand and thus avoid off-target effects that can be induced by the passenger strand of a regular shRNA. Previously, we characterized AgoshRNA processing by deep sequencing and demonstrated that-after Ago2 cleavage-AgoshRNAs acquire a short 3' tail of 1-3 A-nucleotides and are subsequently trimmed, likely by the poly(A)-specific ribonuclease (PARN). As a result, the mature single-stranded AgoshRNA may dock more stably into Ago2. Here we set out to analyze the activity of different synthetic AgoshRNA processing intermediates. Ago2 was found to bind preferentially to partially single-stranded AgoshRNA in vitro. In contrast, only the double-stranded AgoshRNA precursor associated with Ago2 in cells, correlating with efficient intracellular processing and reporter knockdown activity. These results suggest the presence of a cellular co-factor involved in AgoshRNA loading into Ago2 in vivo. We also demonstrate specific AgoshRNA loading in Ago2, but not Ago1/3/4, thus further reducing unwanted side effects.