Pseudogenes populate the mammalian genome as remnants of artefactual incorporation of coding messenger RNAs into transposon pathways. Here we show that a subset of pseudogenes generates endogenous small interfering RNAs (endo-siRNAs) in mouse oocytes. These endo-siRNAs are often processed from double-stranded RNAs formed by hybridization of spliced transcripts from protein-coding genes to antisense transcripts from homologous pseudogenes. An inverted repeat pseudogene can also generate abundant small RNAs directly. A second class of endo-siRNAs may enforce repression of mobile genetic elements, acting together with Piwi-interacting RNAs. Loss of Dicer, a protein integral to small RNA production, increases expression of endo-siRNA targets, demonstrating their regulatory activity. Our findings indicate a function for pseudogenes in regulating gene expression by means of the RNA interference pathway and may, in part, explain the evolutionary pressure to conserve argonaute-mediated catalysis in mammals.