Drosophila Dicer-2 processes RNA substrates into short interfering RNAs (siRNAs). Loquacious-PD (Logs-PD), a dsRNA-binding protein that associates with Dicer-2, is required for processing of a subset of RNA substrates including hairpin RNAs into siRNAs. Inorganic phosphate a small molecule present in all cell types inhibits Dicer-2 from processing precursor of microRNAs (pre-miRNAs), which are processed by Dicer-1. Whether or how Loqs-PD modulates the inhibitory effect of inorganic phosphate on Dicer-2 processing of RNA substrates is unknown. To address this question, I performed in vitro hairpin RNA processing assay with Dicer-2 in the presence or absence of Loqs-PD and/or inorganic phosphate. I found that inorganic phosphate inhibits Dicer-2 alone, but not Dicer-2 + Logs-PD, from processing blunt-end hairpin RNAs into siRNAs. Thus, Loqs-PD removes the inhibitory effect of inorganic phosphate on Dicer-2 processing of blunt-end hairpin RNAs, allowing siRNA production in the presence of inorganic phosphate. (C) 2018 Elsevier Inc. All rights reserved.