Argonaute (Ago) is the catalytic core of small RNA-based gene regulation. Despite a plenty of mechanistic studies on Ago, the dynamical aspects and the mechanistic determinants of target binding and dissociation of Ago-guide remain unclear. Here, by using single-molecule fluorescence resonance transfer (FRET) assays and Thermus thermophilus Ago, we reveal that Ago-guide dynamically associates and dissociates with a target, and that different regions of guide-target base pairing are responsible for different steps of target recognition by Ago-guide. In addition, we show that the 3’-end of the guide strand dynamically anchors at and releases from the PAZ domain of Ago, and that the 3’-end anchoring of the guide strand greatly accelerates the target dissociation by destabilizing the guide-target duplex. Collectively, our results implicate that the target binding/dissociation of Ago-guide is executed through the dynamic interplays among Ago, guide, and target.