We describe the solution structures of the Argonaute2 PAZ domain bound to RNA and DNA oligonucleotides. The structures reveal a unique mode of single-stranded nucleic acid binding in which the two 3'-terminal nucleotides are buried in a hydrophobic cleft. We propose that the PAZ domain contributes to the specific recognition of siRNAs by providing a binding pocket for their characteristic two-nucleotide 3' overhangs.