Both KRAS and EGFR are essential mediators of pancreatic cancer development and interact with Argonaute 2 (AGO2) to perturb its function. Here, in a mouse model of mutant KRAS-driven pancreatic cancer, loss of AGO2 allows precursor lesion (PanIN) formation yet prevents progression to pancreatic ductal adenocarcinoma (PDAC). Precursor lesions with AGO2 ablation undergo oncogene-induced senescence with altered microRNA expression and EGFR/RAS signaling, bypassed by loss of p53. In mouse and human pancreatic tissues, PDAC progression is associated with increased plasma membrane localization of RAS/AGO2. Furthermore, phosphorylation of AGO2 disrupts both the wild-type and oncogenic KRAS-AGO2 interaction, albeit under different conditions. ARS-1620 (G12C-specific inhibitor) disrupts the KRAS -AGO2 interaction, suggesting that the interaction is targetable. Altogether, our study supports a biphasic model of pancreatic cancer development: an AGO2-independent early phase of PanIN formation reliant on EGFR-RAS signaling, and an AGO2-dependent phase wherein the mutant KRAS-AGO2 interaction is critical for PDAC progression.