Adenosine deaminases acting on RNA (ADARs) are involved in RNA editing that converts adenosine residues to inosine specifically in double-stranded RNAs. In this study, we investigated the interaction of the RNA editing mechanism with the RNA interference (RNAi) machinery and found that ADAR1 forms a complex with Dicer through direct protein-protein interaction. Most importantly, ADAR1 increases the maximum rate (Vmax) of pre-microRNA (miRNA) cleavage by Dicer and facilitates loading of miRNA onto RNA-induced silencing complexes, identifying a new role of ADAR1 in miRNA processing and RNAi mechanisms. ADAR1 differentiates its functions in RNA editing and RNAi by the formation of either ADAR1/ADAR1 homodimer or Dicer/ADAR1 heterodimer complexes, respectively. As expected, the expression of miRNAs is globally inhibited in ADAR1−/− mouse embryos, which, in turn, alters the expression of their target genes and might contribute to their embryonic lethal phenotype.