Small hairpin RNAs (shRNAs) with 19-base-pair, or shorter, stems (short shRNAs [sshRNAs]) have been found to constitute a class whose mechanism of action appears to be distinct from that of small interfering RNAs (siRNAs) or longer shRNAs. These sshRNAs can be as active as canonical siRNAs or longer shRNAs. Their activity is affected by whether the antisense strand is positioned 5' or 3' to the loop (L or R sshRNAs, respectively). Dicer seems not to be involved in the processing of sshRNAs, although the mechanism of target gene suppression by these hairpins is through Ago2-mediated mRNA cleavage. In this study, the effects of chemical modifications on the potency, serum stability, and innate immune response of sshRNAs were investigated. Deoxynucleotide substitution and 2'-O-methyl (2'-OMe) modification in the sense strand and loop did not affect silencing activity, but, unlike with siRNAs, when placed in the antisense strand these modifications were detrimental. Conjugation with bulky groups at the 5'-end of L sshRNAs or 3'-end of R sshRNAs had a negative impact on the potency. Unmodified sshRNAs in dimer form or with blunt ends were immunostimulatory. Some modifications such as 3'-end conjugation and phosphorothioate linkages on the backbone of the sshRNAs could also induce inflammatory cytokine production. However, 2'-OMe substitution of sshRNAs abrogated the innate immune response and improved the serum stability of the hairpins.