RNA interference (RNAi) is the main host defense system against viral infection in plants, insects, and worms; however, whether RNAi plays a role in the antiviral response in mammalian cells is unknown. To better understand how mammalian viruses interact with the RNAi pathway, we have developed a two-pronged approach. Firstly, we engineered a sensitive screen for RNAi activity that we have used to explore the effects of viral gene products on cellular RNAi activity. Nodamura virus (No V) is a small RNA virus that is fully infectious in insect and mammalian cells. No V encodes a protein (B2) that we have shown to be a potent inhibitor of RNAi in mammalian cells and furthermore demonstrate that this inhibition is due at least in part to NoV B2's biochemical activity as a double stranded RNA binding protein. Specifically, B2 binds RNA that corresponds to substrates and products of the Dicer-mediated cleavage reaction leading to inhibition of the RNAi pathway at multiple points. Secondly, we have developed a method for identification of virally-encoded microRNAs (small RNA regulators of gene expression that utilize components of the RNAi machinery) that combines computational prediction with gene array analysis. Utilizing this novel approach, we have identified 24 previously unknown virally-encoded pre-microRNAs in members of the Polyoma and Herpes DNA tumor virus families. Intriguingly, members of the Polyoma virus family encode different microRNAs (with no detectable sequence similarity), that provide the same function; i.e. to autoregulate viral gene expression. In at least one virus (SV40) this autoregulation results in reduced exposure of viral antigens to components of the host immune system. Lastly, the implications of these findings for understanding the lifecycles of the human tumor viruses Epstein Barr and Kaposi Sarcoma Herpesviruses will be discussed.