GW182 family proteins are essential in animal cells for microRNA (miRNA)-mediated gene silencing, yet the molecular mechanism that allows GW182 to promote translational repression and mRNA decay remains largely unknown. Previous studies showed that while the GW182 N-terminal domain interacts with Argonaute proteins, translational repression and degradation of miRNA targets are promoted by a bipartite silencing domain comprising the GW182 middle and C-terminal regions. Here we show that the GW182 C-terminal region is required for GW182 to release silenced mRNPs; moreover, GW182 dissociates from miRNA targets at a step of silencing downstream of deadenylation, indicating that GW182 is required to initiate but not to maintain silencing. In addition, we show that the GW182 bipartite silencing domain competes with eukaryotic initiation factor 4G for binding to PABPC1. The GW182-PABPC1 interaction is also required for miRNA target degradation; accordingly, we observed that PABPC1 associates with components of the CCR4-NOT deadenylase complex. Finally, we show that PABPC1 overexpression suppresses the silencing of miRNA targets. We propose a model in which the GW182 silencing domain promotes translational repression, at least in part, by interfering with mRNA circularization and also recruits the deadenylase complex through the interaction with PABPC1.