Higher plants use RNA silencing as a defense mechanism against viral infections, but viruses may encode suppressor proteins that counteract these defenses. Several virus-encoded suppressors also exert an inhibitory effect on endogenous small RNA regulatory pathways. Here we characterized the Tobacco rattle virus-encoded 16-kDa (TRV-16K) protein as a suppressor that blocked local RNA silencing induced by single (s)- and double-stranded (ds) RNA, indicating that TRV-16K interfered with a step in the silencing pathway downstream of dsRNA formation. The suppressor activity of TRV-16K was severely compromised by moderate to high dosages of dsRNA inducer. When silencing was locally triggered by ssRNA or low levels of dsRNA, silencing suppression by TRV-16K was associated with reduced accumulation of silencing-related siRNAs. TRV-16K also prevented partially cell-to-cell movement and systemic propagation of silencing but not transitive amplification of RNA silencing. We showed that neither TRV nor TRV-16K caused a global deregulation of the microRNA-regulatory pathway in Arabidopsis, suggesting that interference with microRNA biology was not a prerequisite for TRV, and probably many other plant viruses, to develop systemic infections in plants.