In animal germ cells, PIWI proteins use piRNAs to detect active selfish genetic elements. Base-pairing to a piRNA defines transposon recognition, but how this interaction triggers a defensive response remains unclear. Here, we identify a transposon recognition complex composed of the silkworm proteins Siwi, GTSF1, and Maelstrom. Biochemical and cryo-electron microscopy (cryo-EM) analyses show that extended piRNA-target pairing locks Siwi in a conformation that recruits GTSF1 and Maelstrom. Extended piRNA-target pairing is recognized by the N-terminal helix of Maelstrom and the first zinc finger of GTSF1, which act together to hold Siwi in an endonucleolytically active state. The resulting activated complex, termed Siwi∗, rapidly cleaves target RNAs and recruits the piRNA biogenesis factor Spindle-E. Structural predictions reveal related complexes in animals ranging from humans to sponges, indicating PIWI∗ assembly is a conserved transposon recognition mechanism employed broadly across the metazoan kingdom.