dsRNA uptake from the environment is a common phenomenon in many invertebrates and can be harnessed for acquiring pest control. In the nematode Caenorhabditis elegans, a transmembrane protein named systemic RNAi deficient-2 (sid-2) is required for dsRNA uptake from the environment through the intestine. Furthermore, the tyrosine-protein kinase sid-3 promotes import dsRNA. However, the molecular mechanism underlying environmental RNA uptake and its natural phenotypic roles are largely unknown. Here I characterized the intracellular properties of SID-2 and its role during the nematode development. I determined SID-2 localization at the intestinal apical membrane and the trans-Golgi-network (TGN). This localization is dependent on sid-3 and its potential substrate viro-2, hence demonstrating a molecular interplay between the different SID proteins. The spatial organisation of SID-2 is conserved across species, suggesting a role for the TGN in environmental RNA uptake. By combing small RNA and transcriptome profiling with developmental studies I identified a novel role for systemic RNAi in worm morphology. A detailed phenotypical analysis ruled out a nutritional role for dsRNA uptake, implying that environmental RNA uptake affects morphology through gene regulation. These results uncover the first phenotypic role for the Sid pathway and identifies the TGN as a central cellular compartment for environmental dsRNA uptake.