MicroRNAs (miRNAs) inhibit mRNA expression in general by base pairing to the 3'UTR of target mRNAs and consequently inhibiting translation and/or initiating poly(A) tail deadenylation and mRNA destabilization. Here we examine the mechanism and kinetics of miRNA-mediated deadenylation in mouse Krebs-2 ascites extract. We demonstrate that miRNA-mediated mRNA deadenylation occurs subsequent to initial translational inhibition, indicating a two-step mechanism of miRNA action, which serves to consolidate repression. We show that a let-7 miRNA-loaded RNA-induced silencing complex (miRISC) interacts with the poly(A)-binding protein (PABP) and the CAF1 and CCR4 deadenylases. In addition, we demonstrate that miRNA-mediated deadenylation is dependent upon CAF1 activity and PABP, which serves as a bona fide miRNA coactivator. Importantly, we present evidence that GW182, a core component of the miRISC, directly interacts with PABP via its C-terminal region and that this interaction is required for miRNA-mediated deadenylation.