MicroRNAs (miRNAs) are approximately 21-nucleotide-long RNA molecules regulating gene expression in multicellular eukaryotes. In metazoa, miRNAs act by imperfectly base-pairing with the 3' untranslated region of target messenger RNAs (mRNAs) and repressing protein accumulation by an unknown mechanism. We demonstrate that endogenous let-7 microribonucleoproteins (miRNPs) or the tethering of Argonaute (Ago) proteins to reporter mRNAs in human cells inhibit translation initiation. M(7)G-cap-independent translation is not subject to repression, suggesting that miRNPs interfere with recognition of the cap. Repressed mRNAs, Ago proteins, and miRNAs were all found to accumulate in processing bodies. We propose that localization of mRNAs to these structures is a consequence of translational repression.