The enzyme Dicer generates 21-25 nucleotide RNAs that target specific mRNAs for silencing during RNA interference and related pathways. Although their active sites and RNA binding regions are functionally conserved, the helicase domains have distinct activities in the context of different Dicer enzymes. To examine the evolutionary origins of Dicer helicase functions, we investigated two related Dicer enzymes from the thermophilic fungus Sporotrichum thermophile. RNA cleavage assays showed that S. thermophile Dicer-1 (StDicer-1) can process hairpin precursor microRNAs, whereas StDicer-2 can only cleave linear double-stranded RNAs. Furthermore, only StDicer-2 possesses robust ATP hydrolytic activity in the presence of double-stranded RNA. Deletion of the StDicer-2 helicase domain increases both StDicer-2 cleavage activity and affinity for hairpin RNA. Notably, both StDicer-1 and StDicer-2 could complement the distantly related yeast Schizosaccharomyces pombe lacking its endogenous Dicer gene but only in their full-length forms, underscoring the importance of the helicase domain. These results suggest an in vivo regulatory function for the helicase domain that may be conserved from fungi to humans. 