Drosophila microRNAs (miRNAs) and small interfering RNAs (siRNAs) are generally produced by different Dicer enzymes (Dcr-1 and Dcr-2) and sorted to functionally distinct Argonaute effectors (AGO1 and AGO2). However, there is cross talk between these pathways, as highlighted by the recognition that Drosophila miRNA* strands (the partner strands of mature miRNAs) are generated by Dcr-1 but are preferentially sorted to AGO2. Here, we show that a component of the siRNA loading complex, R2D2, is essential both to load endogenously encoded siRNAs (endo-siRNAs) into AGO2 and to prevent endo-siRNAs from binding to AGO1. Northern blot analysis and deep sequencing showed that in the r2d2 mutant, all classes of endo-siRNAs were unable to load AGO2 and instead accumulated in the AGO1 complex. Such redirection was specific to endo-siRNAs and was not observed with miRNA* strands. We observed functional consequences of altered sorting in RNA interference (RNAi) mutants, since endo-siRNAs generated from cis-natural antisense transcripts (cis-NAT-siRNA) exhibited evidence for biased maturation as single strands in AGO1 according to thermodynamic asymmetry and a hairpin-derived endo-siRNA formed cleavage-competent complexes with AGO1 upon mutation of r2d2. Finally, we demonstrated a direct role for the R2D2/Dcr-2 heterodimer in sensing central mismatch positions that direct miRNA* strands to AGO2. Together, these data reveal new roles of R2D2 in organizing small RNA networks in Drosophila.