Small interfering RNA (siRNA) has become a powerful tool for selectively silencing gene expression in cultured mammalian cells. Because different siRNAs of the same gene have variable silencing capacities, RNA interference with synthetic siRNA is inefficient and cost intensive, especially for functional genomic studies. Here we report the use of Escherichia coli RNase III to cleave double-stranded RNA (dsRNA) into endoribonuclease-prepared siRNA (esiRNA) that can target multiple sites within an mRNA. esiRNA recapitulates the potent and specific inhibition by long dsRNA in Drosophila S2 cells. In contrast to long dsRNA, esiRNA mediates effective RNA interference without apparent nonspecific effect in cultured mammalian cells. We found that sequence-specific interference by esiRNA and the nonspecific IFN response activated by long dsRNA are independent pathways in mammalian cells. esiRNA works by eliciting the destruction of its cognate mRNA. Because of its simplicity and potency, this approach is useful for analysis of mammalian gene functions.