Mechanism of action of hammerhead ribozymes has been investigated and their intracellular activities have been improved. Based on the improved ribozymes and more recently discovered natural RNAi, we have created libraries of both ribozymes and short hairpin RNAs (shRNAs). The introduction of a library of active ribozymes or shRNAs into cells, and the subsequent screening for phenotypic changes, allows the rapid identification of gene function.