In malignant melanoma, a highly aggressive form of skin cancer, many microRNAs are aberrantly expressed contributing to tumorigenesis and progression. Further, deregulation of microRNA processing enzymes, like the miRNA-binding protein Argonaute 2, significantly impacts microRNA function. This study characterizes a novel splice variant of Argonaut 2, AGO2-ex1/3. AGO2-ex1/3 is substantially expressed in different melanoma cell lines and patient-derived tissue samples. It is a mature mRNA, which is translated into an N-terminally truncated Argonaute 2 protein form. Molecular dynamics simulations show that the PAZ, MID, and PIWI domain largely retain their structure in AGO2-ex1/3 and that the truncation of the N-terminus leads to an increased interdomain flexibility. Expression of AGO2-ex1/3 provides a survival advantage for melanoma cells while the knockdown causes significantly reduced proliferation and increases apoptosis. RNA-sequencing revealed that in cells lacking AGO2-ex1/3 expression many miRNA target genes are deregulated, implicating a considerable role of AGO2-ex1/3 for miRNA function. This study inaugurates insights into an important role of a so far unknown splice variant of Argonaute 2 for the miRNA pathway as well as the mechanisms which drive growth and survival of melanoma cells. This knowledge provides the basis for potential new promising therapeutic targets focusing on small RNA-mediated gene regulation in melanoma.