MicroRNAs are regulators of gene expression whose functions are critical for normal development and physiology. We have previously characterized mutations in a Caenorhabditis elegans microRNA-specific Argonaute ALG-1 (Argonaute-like gene) that are antimorphic [alg-1(anti)]. alg-1(anti) mutants have dramatically stronger microRNA-related phenotypes than animals with a complete loss of ALG-1. ALG-1(anti) miRISC (microRNA induced silencing complex) fails to undergo a functional transition from microRNA processing to target repression. To better understand this transition, we characterized the small RNA and protein populations associated with ALG-1(anti) complexes in vivo. We extensively characterized proteins associated with wild-type and mutant ALG-1 and found that the mutant ALG-1(anti) protein fails to interact with numerous miRISC cofactors, including proteins known to be necessary for target repression. In addition, alg-1(anti) mutants dramatically overaccumulated microRNA* (passenger) strands, and immunoprecipitated ALG-1(anti) complexes contained nonstoichiometric yields of mature microRNA and microRNA* strands, with some microRNA* strands present in the ALG-1(anti) Argonaute far in excess of the corresponding mature microRNAs. We show complex and microRNA-specific defects in microRNA strand selection and microRNA* strand disposal. For certain microRNAs (for example mir-58), microRNA guide strand selection by ALG-1(anti) appeared normal, but microRNA* strand release was inefficient. For other microRNAs (such as mir-2), both the microRNA and microRNA* strands were selected as guide by ALG-1(anti), indicating a defect in normal specificity of the strand choice. Our results suggest that wild-type ALG-1 complexes recognize structural features of particular microRNAs in the context of conducting the strand selection and microRNA* ejection steps of miRISC maturation.