A crucial step in the RNA interference (RNAi) pathway involves the assembly of RISC, the RNA‐induced silencing complex. RISC initially recognizes a double‐stranded short interfering RNA (siRNA), but only one strand is finally retained in the functional ribonucleoprotein complex. The non‐incorporated strand, or ‘passenger’ strand, is removed during the assembly process and most probably degraded thereafter. In this report, we show that the passenger strand is cleaved during the course of RISC assembly following the same rules established for the siRNA‐guided cleavage of a target RNA. Chemical modifications impairing the cleavage of the passenger strand also impair the cleavage of a target RNA in vitro as well as the silencing of a reporter gene in vivo, suggesting that passenger strand removal is facilitated by its cleavage during RISC assembly. Interestingly, target RNA cleavage can be rescued if an otherwise non‐cleavable passenger strand shows a nick at the scissile phosphodiester bond, which further indicates that the cleavage event per se is not essential.