Genetic screens performed in model organisms have helped identify key components of the RNA interference (RNAi) pathway. Recessive genetic screens have recently become feasible through the use of mouse embryonic stem (ES) cells that are Bloom's syndrome protein (Blm) deficient. Here, we developed and performed a recessive genetic screen to identify components of the mammalian RNAi pathway in Blm-deficient ES cells. Genome-wide mutagenesis using a retroviral gene trap strategy resulted in the isolation of putative homozygous RNAi mutant cells. Candidate clones were confirmed by an independent RNAi-based reporter assay and the causative gene trap integration site was identified using molecular techniques. Our screen identified multiple mutant cell lines of Argonaute 2 (Ago2), a known essential component of the RNAi pathway. This result demonstrates that true RNAi components can be isolated by this screening strategy. Furthermore, Ago2 homozygous mutant ES cells provide a null genetic background to perform mutational analyses of the Ago2 protein. Using genetic rescue, we resolve an important controversy regarding the role of two phenylalanine residues in Ago2 activity.