Small RNA-mediated gene silencing is a fundamental gene regulatory mechanism, which is conserved in many organisms. Argonaute (Ago) family proteins in the RNA-induced silencing complex (RISC) play crucial roles in RNA interference (RNAi) pathways. In the silkworm Bombyx mori, four Ago proteins have been identified, named as Ago1, Ago2, Ago3 and Siwi. Ago2 participates in double-stranded RNA (dsRNA)-induced RNAi, whereas Ago3 and Siwi are involved in the Piwi-interacting RNA (piRNA) pathway. However, there is no experimental evidence concerning silkworm Ago1 (BmAgo1) in the RNAi mechanism. In the present study, we analysed the function of BmAgo1 in the microRNA (miRNA)-mediated RNAi pathway using tethering and miRNA sensor reporter assays. These results clearly demonstrate that BmAgo1 plays an indispensable role in translation repression in silkworm. Moreover, coimmunoprecipitation data indicated that BmAgo1 interacts with BmDcp2, an orthologue of mRNA-decapping enzyme 2 (Dcp2) protein in the Drosophila processing-bodies (P-bodies). Substitutions of two conserved phenylalanines (F522 and F557) by valines in the MC motif strongly impaired the function of BmAgo1 in translation repression and its localization in P-bodies, suggesting that these two amino acid residues in the MC motif of BmAgo1 are prerequisites for mRNA translation repression in B. mori.