Fragile X syndrome is a common form of inherited mental retardation caused by the loss of FMR1 expression. The FMR1 gene encodes an RNA-binding protein that associates with translating ribosomes and acts as a negative translational regulator. In Drosophila, the fly homolog of the FMR1 protein (dFMR1) binds to and represses the translation of an mRNA encoding of the microtuble-associated protein Futsch. We have isolated a dFMR1-associated complex that includes two ribosomal proteins, L5 and L11, along with 5S RNA. The dFMR1 complex also contains Argonaute2 (AGO2) and a Drosophila homolog of p68 RNA helicase (Dmp68). AGO2 is an essential component for the RNA-induced silencing complex (RISC), a sequence-specific nuclease complex that mediates RNA interference (RNAi) in Drosophila. We show that Dmp68 is also required for efficient RNAi. We further show that dFMR1 is associated with Dicer, another essential component of the RNAi pathway, and microRNAs (miRNAs) in vivo, suggesting that dFMR1 is part of the RNAi-related apparatus. Our findings suggest a model in which the RNAi and dFMR1-mediated translational control pathways intersect in Drosophila. Our findings also raise the possibility that defects in an RNAi-related machinery may cause human disease.