Dicer is a multi‐domain RNase III‐related endonuclease responsible for processing double‐stranded RNA (dsRNA) to small interfering RNAs (siRNAs) during a process of RNA interference (RNAi). It also catalyses excision of the regulatory microRNAs from their precursors. In this work, we describe the purification and properties of a recombinant human Dicer. The protein cleaves dsRNAs into∼ 22 nucleotide siRNAs. Accumulation of processing intermediates of discrete sizes, and experiments performed with substrates containing modified ends, indicate that Dicer preferentially cleaves dsRNAs at their termini. Binding of the enzyme to the substrate can be uncoupled from the cleavage step by omitting Mg 2+ or performing the reaction at 4 C. Activity of the recombinant Dicer, and of the endogenous protein present in mammalian cell extracts, is stimulated by limited proteolysis, and the proteolysed enzyme becomes active at 4 C. Cleavage of dsRNA by purifed Dicer and the endogenous enzyme is ATP independent. Additional experiments suggest that if ATP participates in the Dicer reaction in mammalian cells, it might be involved in product release needed for the multiple turnover of the enzyme.