Small circular single-stranded DNA satellites, called betasatellites, have been found in association with some monopartite begomovirus infections. The Cotton leaf curl Multan betasatellite (CLCuMuB) is known to influence symptom induction in cotton leaf curl disease. CLCuMuB contains a single gene, βC1, whose product is a pathogenicity determinant and a suppressor of RNA silencing. Although induction of RNA silencing by RNA and DNA viruses has been well documented in plants, the interactions between betasatellites and the host's silencing machinery remain poorly understood. In this study, the transgenic expression of βC1 from CLCuMuB in Arabidopsis thaliana plants produced severe developmental abnormalities, which resembled those produced by mutations in the key genes of the gene silencing pathway. Analysis of transgenic plants expressing CLCuMuB βC1 using real-time PCR showed that the expression levels of both AGO1 and DCL1 genes were significantly increased. In contrast, the expression of HEN1 gene in the βC1-expressing leaf tissues was similar to that of wild-type plants. The CLCuMuB βC1 protein was found to physically interact with the AGO1 protein in a yeast two-hybrid system. It is possible that specific targeting of the gene silencing key components by the CLCuMuB βC1 inhibits the RNA silencing-based host defence.