PIWI-interacting RNAs (piRNAs) are at the center of a small RNA-based immune system that defends genomes against the deleterious action of mobile genetic elements (transposons). PiRNAs are highly variable in sequence with extensive targeting potential. Their diversity is restricted by their preference to start with a Uridine (U) at the 5’ most position (1U-bias), a bias that remains poorly understood. Here we uncover that the 1U-bias of Piwi-piRNAs is established by consecutive discrimination against all nucleotides but U, first during piRNA biogenesis and then upon interaction with Piwi’s specificity loop. Sequence preferences during piRNA processing also restrict U across the piRNA body with the potential to directly impact target recognition. Overall, the uncovered signatures could modulate specificity and efficacy of piRNA-mediated transposon restriction, and provide a substrate for purifying selection in the ongoing arms race between genomes and their mobile parasites.