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Small RNAs (sRNAs) regulate plant development, stress responses and genome stability by guiding ARGONAUTE (AGO) proteins to their targets. AGO1 is the major effector of microRNA (miRNA) and 21/22-nucleotide (nt) secondary small interfering RNA (siRNA) pathways in Arabidopsis thaliana. However, how AGO1 subcellular dynamics shape sRNA loading and silencing remained unclear. Here, we validate a functional nuclear localization signal (NLS) in the N-terminal extension of AGO1 and identify IMPORTIN α2 (IMPα2) as a nuclear import factor acting within a larger importin α network. Using engineered nuclear-only and cytoplasmic-only AGO1 variants, we show that exclusive cytoplasmic AGO1 allows full miRNA target repression and secondary siRNA production in ago1 mutants, whereas nuclear-retained AGO1 only partially rescues miRNA function and exerts a dominant-negative effect on secondary siRNA biogenesis. sRNA immunoprecipitation assay reveals that miRNAs are preferentially loaded into AGO1 in the nucleus, while tasiRNA loading predominantly occurs in the cytoplasm. Collectively, our findings demonstrate that AGO1 spatial partitioning itself quantitatively shapes the efficiency and specificity of sRNA loading and the silencing outputs.