We have previously demonstrated that a modified U1 snRNA inhibits expression of a number of targeted transgenes. Here we exploit the ability of the modified U1 snRNA to inhibit endogenous gene expression and define the mechanism responsible for this inhibitory action. MC3T3-E1 cells stably transfected with U1 anti-Cbfa1 show a change of morphology from polygonal to fibroblast-like cells. This visual observation was supported by an 80% reduction of Cbfa1 expression and suppression of downstream genes associated with osteoblast differentiation. In rat ROS 17/2.8 cells, osteocalcin and Col1a1 gene expression was reduced up to 90% by the U1 anti-osteocalcin or U1 anti-Col1a1 construct, respectively. The length of mature osteocalcin mRNA poly(A) tail was significantly shortened in the targeted mRNA by transcript-specific poly(A) test (PAT)-PCR. These data demonstrate that the modified U1 snRNA is able to reduce endogenous gene expression by limiting the polyadenylation of the targeted pre-mRNA transcript.