In the last decade, many diverse RNAi (RNA interference) pathways have been discovered that mediate gene silencing at epigenetic, transcriptional and post-transcriptional levels. The diversity of RNAi pathways is inherently linked to the evolution of Ago (Argonaute) proteins, the central protein component of RISCs (RNA-induced silencing complexes). An increasing number of diverse Agos have been identified in different species. The functions of most of these proteins are not yet known, but they are generally assumed to play roles in development, genome stability and/or protection against viruses. Recent research in the nematode Caenorhabditis elegans has expanded the breadth of RNAi functions to include transgenerational epigenetic memory and, possibly, environmental sensing. These functions are inherently linked to the production of secondary siRNAs (small interfering RNAs) that bind to members of a clade of WAGOs (worm-specific Agos). In the present article, we review briefly what is known about the evolution and function of Ago proteins in eukaryotes, including the expansion of WAGOs in nematodes. We postulate that the rapid evolution of WAGOs enables the exceptional functional plasticity of nematodes, including their capacity for parasitism.