Repetitive-element-derived Piwi-interacting RNAs (piRNAs)(1,2) act together with Piwi proteins Mili (also known as Piwil2) and Miwi2 (also known as Piwil4) in a genome defence mechanism that initiates transposon silencing via DNA methylation in the mouse male embryonic germ line. This silencing depends on the participation of the Piwi proteins in a slicer-dependent piRNA amplification pathway and is essential for male fertility(3,4). A third Piwi family member, Miwi (also known as Piwil1), is expressed in specific postnatal germ cells and associates with a unique set of piRNAs of unknown function(5-7). Here we show that Miwi is a small RNA-guided RNase (slicer) that requires extensive complementarity for target cleavage in vitro. Disruption of its catalytic activity in mice by a single point mutation causes male infertility, and mutant germ cells show increased accumulation of LINE1 retrotransposon transcripts. We provide evidence for Miwi slicer activity directly cleaving transposon messenger RNAs, offering an explanation for the continued maintenance of repeat-derived piRNAs long after transposon silencing is established in germline stem cells. Furthermore, our study supports a slicer-dependent silencing mechanism that functions without piRNA amplification. Thus, Piwi proteins seem to act in a two-pronged mammalian transposon silencing strategy: one promotes transcriptional repression in the embryo, the other reinforces silencing at the post-transcriptional level after birth.