Required for RNA-mediated gene silencing (RNAi). Binds to short RNAs such as microRNAs (miRNAs) and represses the translation of mRNAs which are complementary to them. Proposed to be involved in stabilization of small RNA derivates (siRNA) derived from processed RNA polymerase III-transcribed Alu repeats containing a DR2 retinoic acid response element (RARE) in stem cells and in the subsequent siRNA-dependent degradation of a subset of RNA polymerase II-transcribed coding mRNAs by recruiting a mRNA decapping complex involving EDC4 (PubMed:19174539). Possesses RNA slicer activity but only on select RNAs bearing 5'- and 3'-flanking sequences to the region of guide-target complementarity (By similarity). endonucleolytic cleavage to 5'-phosphomonoester. Interacts with EIF4B, IMP8, PRMT5 and TNRC6B (By similarity). Interacts with APOBEC3F, APOBEC3G and APOBEC3H. Interacts with EDC4 (By similarity). Ubiquitinated on surface-exposed lysines by a SCF-like E3 ubiquitin-protein ligase complex containing ZSWIM8 during target-directed microRNA degradation (TDMD), a process that mediates degradation of microRNAs (miRNAs). Ubiquitination by the SCF-like E3 ubiquitin-protein ligase complex containing ZSWIM8 leads to its subsequent degradation, thereby exposing miRNAs for degradation. ZSWIM8 recognizes and binds AGO3 when it is engaged with a TDMD target. Belongs to the argonaute family. Ago subfamily.