We solved the crystal structure of human ARGONAUTE1 (hAGO1) bound to endogenous 5-phosphorylated guide RNAs. To identify structural changes that evolutionarily rendered hAGO1 inactive, we compared our structure with published structures of guide-RNA-containing and cleavage-active hAGO2. Aside from mutation of a catalytic tetrad residue, proline residues at positions 670 and 675 in hAGO1 introduce a kink in the cS7 loop and thereby forming a convex surface within the hAGO1 nucleic-acid-binding channel near the inactive catalytic site. We predicted that even upon restoration of the catalytic tetrad, hAGO1-cS7 sterically hinders the placement of a fully-paired guide-target RNA duplex into the endonuclease active site. Consistent with this hypothesis, reconstitution of the catalytic tetrad (R805H) led to low level hAGO1 cleavage activity, whereas combining R805H with cS7 substitutions (P670S and P675Q) substantially augmented hAGO1 activity. Evolutionary changes to hAGO1 were subtle and readily reversible, suggesting that loading of guide RNA and seed-based miRNA-target RNA pairing constrain its sequence drift. Structure-guided design of mutations that confer slicer activity to hAGO1. RNAs were isolated from recombinant purified hAGO1 and hAGO2, processed from baculovirus-infected Trichoplusia ni insect cells, and then processed for Illumina HiSeq. In addition, total RNA samples from AGO1 baculouvirus infected vs. non-infected Trichoplusia ni cells were isolated and also processed for Illumina HiSeq.