RNA silencing refers to small regulatory RNA-mediated processes that repress endogenous gene expression and defend hosts from offending viruses. As an anti-host defense mechanism, viruses encode suppressors that can block RNA silencing pathways. Cucumber mosaic virus (CMV)-encoded 2b protein was among the first suppressors identified that could inhibit post-transcriptional gene silencing (PTGS), but with little or no effect on miRNA functions. The mechanisms underlying 2b suppression of RNA silencing are unknown. Here, we demonstrate that the CMV 2b protein also interferes with miRNA pathways, eliciting developmental anomalies partially phenocopying ago1 mutant alleles. In contrast to most characterized suppressors, 2b directly interacts with Argonaute1 (AGO1) in vitro and in vivo, and this interaction occurs primarily on one surface of the PAZ-containing module and part of the PIWI-box of AGO1. Consistent with this interaction, 2b specifically inhibits AGO1 cleavage activity in RISC reconstitution assays. In addition, AGO1 recruits virus-derived small interfering RNAs (siRNAs) in vivo, suggesting that AGO1 is a major factor in defense against CMV infection. We conclude that 2b blocks AGO1 cleavage activity to inhibit miRNA pathways, attenuate RNA silencing, and counter host defense. These findings provide insight on the molecular arms race between host antiviral RNA silencing and virus counterdefense.