Female gamete development in Arabidopsis ovules comprises two phases. During megasporogenesis, a somatic ovule cell differentiates into a megaspore mother cell and undergoes meiosis to produce four haploid megaspores, three of which degrade. The surviving functional megaspore participates in megagametogenesis, undergoing syncytial mitosis and cellular differentiation to produce a multicellular female gametophyte containing the egg and central cell, progenitors of the embryo and endosperm of the seed. The transition between megasporogenesis and megagametogenesis is poorly characterised, partly owing to the inaccessibility of reproductive cells within the ovule. Here, laser capture microdissection was used to identify genes expressed in and/or around developing megaspores during the transition to megagametogenesis. ARGONAUTE5 (AGO5), a putative effector of small RNA (sRNA) silencing pathways, was found to be expressed around reproductive cells during megasporogenesis, and a novel semi-dominant ago5-4 insertion allele showed defects in the initiation of megagametogenesis. Expression of a viral RNAi suppressor, P1/Hc-Pro, driven by the WUSCHEL and AGO5 promoters in somatic cells flanking the megaspores resulted in a similar phenotype. This indicates that sRNA-dependent pathways acting in somatic ovule tissues promote the initiation of megagametogenesis in the functional megaspore. Notably, these pathways are independent of AGO9, which functions in somatic epidermal ovule cells to inhibit the formation of multiple megaspore-like cells. Therefore, one somatic sRNA pathway involving AGO9 restricts reproductive development to the functional megaspore and a second pathway, inhibited by ago5-4 and P1/Hc-Pro, promotes megagametogenesis.