microRNAs (miRNAs) bind to Argonaute (Ago) proteins and inhibit translation or promote degradation of mRNA targets. Human let-7 miRNA inhibits translation initiation of mRNA targets in an m⁷G cap-dependent manner and also appears to block protein production, but the molecular mechanism(s) involved is unknown and the role of Ago proteins in translational regulation remains elusive. Here we identify a motif (MC) within the Mid domain of Ago proteins, which bears significant similarity to the m⁷G cap-binding domain of eIF4E, an essential translation initiation factor. We identify conserved aromatic residues within the MC motif of human Ago2 that are required for binding to the m⁷G cap and for translational repression but do not affect the assembly of Ago2 with miRNA or its catalytic activity. We propose that Ago2 represses the initiation of mRNA translation by binding to the m⁷G cap of mRNA targets, thus likely precluding the recruitment of eIF4E.