Argonaute proteins and associated small RNAs have critical role in development by regulating messenger RNA stability, protein synthesis, chromatin organization and genome structure. In animals, Argonaute proteins segregate into two subfamilies. Ubiquitously expressed members of Argonaute subfamily bind 21-23 nt RNA and act in RNA interference and in microRNA-mediated gene regulation. The Piwi subfamily is involved in germline-specific events such as germline stem cell maintenance and meiosis. Particularly, three members of the Piwi subfamily in mouse are critical for successful spermatogenesis. Recently we identified a new class of 25-30 nt RNAs (piRNAs) as a binding partner of Piwi proteins in the mammalian male germ cells. piRNAs are highly abundant in germ cells and accumulate at the onset of meiosis. Thousands of identified piRNAs show distinctive localization patterns in the genome, being predominantly grouped into 20-90-kilobase clusters scattered throughout genome. We explore biogenesis of piRNAs and function of Piwi-piRNA complexes in the mammalian and Drosophila germline.