RNA silencing phenomena, known as post‐transcriptional gene silencing in plants, quelling in fungi, and RNA interference (RNAi) in animals, are mediated by double‐stranded RNA (dsRNA) and mechanistically intersect at the ribonuclease Dicer. Here, we report cloning and expression of the 218 kDa human Dicer, and characterization of its ribonuclease activity and dsRNA‐binding properties. The recombinant enzyme generated∼ 21–23 nucleotide products from dsRNA. Processing of the microRNA let‐7 precursor by Dicer produced an apparently mature let‐7 RNA. Mg 2+ was required for dsRNase activity, but not for dsRNA binding, thereby uncoupling these reaction steps. ATP was dispensable for dsRNase activity in vitro. The Dicer· dsRNA complex formed at high KCl concentrations was catalytically inactive, suggesting that ionic interactions are involved in dsRNA cleavage. The putative dsRNA‐binding domain located at the C‐terminus of Dicer was demonstrated to bind dsRNA in vitro. Human Dicer expressed in mammalian cells colocalized with calreticulin, a resident protein of the endoplasmic reticulum. Availability of the recombinant Dicer protein will help improve our understanding of RNA silencing and other Dicer‐related processes.