To act as guides in the RNA interference (RNAi) pathway, small interfering RNAs (siRNAs) must be unwound into their component strands, then assembled with proteins to form the RNA-induced silencing complex (RISC), which catalyzes target messenger RNA cleavage. Thermodynamic differences in the base-pairing stabilities of the 5' ends of the two ~21-nucleotide siRNA strands determine which siRNA strand is assembled into the RISC. We show that in Drosophila, the orientation of the Dicer-2/R2D2 protein heterodimer on the siRNA duplex determines which siRNA strand associates with the core RISC protein Argonaute 2. R2D2 binds the siRNA end with the greatest double-stranded character, thereby orienting the heterodimer on the siRNA duplex. Strong R2D2 binding requires a 5'-phosphate on the siRNA strand that is excluded from the RISC. Thus, R2D2 is both a protein sensor for siRNA thermodynamic asymmetry and a licensing factor for entry of authentic siRNAs into the RNAi pathway.