Piwi–piRNA (Piwi-interacting RNA) ribonucleoproteins (piRNPs) enforce retrotransposon silencing, a function critical for preserving the genome integrity of germ cells. The molecular functions of most of the factors that have been genetically implicated in primary piRNA biogenesis are still elusive. Here we show that MOV10L1 exhibits 5′-to-3′ directional RNA-unwinding activity in vitro and that a point mutation that abolishes this activity causes a failure in primary piRNA biogenesis in vivo. We demonstrate that MOV10L1 selectively binds piRNA precursor transcripts and is essential for the generation of intermediate piRNA processing fragments that are subsequently loaded to Piwi proteins. Multiple analyses suggest an intimate coupling of piRNA precursor processing with elements of local secondary structures such as G quadruplexes. Our results support a model in which MOV10L1 RNA helicase activity promotes unwinding and funneling of the single-stranded piRNA precursor transcripts to the endonuclease that catalyzes the first cleavage step of piRNA processing.