The RNA interference (RNAi) pathway is found in most eukaryotic lineages but curiously is absent in others, including that of Saccharomyces cerevisiae. We show that reconstituting RNAi in S. cerevisiae causes loss of a beneficial double-stranded RNA virus known as killer virus. Incompatibility between RNAi and killer viruses extends to other fungal species in that RNAi is absent in all species known to possess double-stranded RNA killer viruses, whereas killer viruses are absent in closely related species that retained RNAi. Thus, the advantage imparted by acquiring and retaining killer viruses explains the persistence of RNAi-deficient species during fungal evolution.