MicroRNAs (miRNAs) are short (∼22 nucleotides) regulators of gene expression acting by direct base pairing to 3'-UTR target sites in messenger RNAs. Mature miRNAs are produced by two sequential endonucleolytic cleavages facilitated by Drosha in the nucleus and Dicer in the cytoplasm. A subclass of miRNAs, termed mirtrons, derives from short introns and enters the miRNA biogenesis pathway as Dicer substrates. Here we uncover a third biogenesis strategy that, similar to mirtron biogenesis, initiates from short introns but bypasses Dicer cleavage. These short introns (80-100 nucleotides), coined agotrons, are associated with and stabilized by Argonaute (Ago) proteins in the cytoplasm. Some agotrons are completely conserved in mammalian species, suggesting that they are functionally important. Furthermore, we demonstrate that the agotrons are capable of repressing mRNAs with seed-matching target sequences in the 3'-UTR. These data provide evidence for a novel RNA regulator of gene expression, which bypasses the canonical miRNA biogenesis machinery.