Acts via the piwi-interacting RNA (piRNA) metabolic process, which mediates the repression of transposable elements during meiosis by forming complexes composed of piRNAs and Piwi proteins and governs the methylation and subsequent repression of transposons. Directly binds piRNAs, a class of 24 to 30 nucleotide RNAs that are generated by a Dicer-independent mechanism and are primarily derived from transposons and other repeated sequence elements. Associates predominantly with sense piRNAs that contain adenine at nucleotide 10, but shows no preference for uridine at the 5' end. In testis, however, associates with Su(Ste) and AT-chX-1 piRNAs mostly produced from antisense precursors. Shows RNA cleavage activity. In the germline, acts to amplify pools of antisense piRNAs, among others Su(Ste), AT-chX-1 and roo, and to limit sense piRNA accumulation. Forms a complex with smg, twin, aub and specific piRNAs that targets nos mRNA (and probably other maternal mRNAS) for deadenylation promoting its decay during early embryogenesis. Involved in transposon silencing in the adult brain. Interacts with aub (PubMed:19959991). Interacts (when methylated on arginine residues) with tud (PubMed:19959991). Forms a complex with smg, twin, aub, nos mRNA and piRNAs that target the nos 3'-untranslated region, in early embryos (PubMed:20953170). Interacts (via the N-terminal region when symmetrically methylated on arginine residues) with papi (via C-terminus); this interaction is RNA-independent and may be required for AGO3 localization to the nuage (PubMed:21447556). Interacts with TER94 and tral (PubMed:21447556). Component of the meiotic nuage, also named P granule, a germ-cell-specific organelle required to repress transposon activity during meiosis. Also found in prominent but discrete foci in the germarium. Unlike other nuage components, does not accumulate at the posterior pole in oocytes and early embryos. In the cytoplasm of syncytial embryos, accumulates in discrete foci. In ovary, expressed in germline stem cells, germline cyst cells, nurse cells and oocytes during early stages. Also found in the somatic cap cells of the germarium. In testis, expressed in germline stem cells, primary gonial cells and early spermatocytes. No expression detected in the somatic hub cells at the apical tip of the testis (at protein level). Expressed in neurons throughout the adult brain and in the mushroom body subdivision in the peduncle. In the mushroom body, expressed only in gamma and core alpha-beta neurons. Expressed maternally. Expression is high in early embryos but gradually decreases as development proceeds (at protein level). Symmetrically dimethylated on Arg-4, Arg-68 and Arg-70, most likely by csul. Female sterility. Male semi-sterility accompanied by production of Ste protein crystals in primary spermatocytes. Mutant males fail to maintain germline stem cells. Belongs to the argonaute family. Piwi subfamily. Has been given the gene name AGO3 by FlyBase based on the literature but is more similar to members of the Piwi subfamily. Extended N-terminus. Contaminating sequence. Sequence of unknown origin in the C-terminal part.