Short-hairpin RNAs (shRNAs) are widely used to produce small-interfering RNAs (siRNAs) for gene silencing. Here we design an alternative siRNA precursor, named single-stranded, Argonaute 2 (Ago2)-processed interfering RNA (saiRNA), containing a 16-18 bp stem and a loop complementary to the target transcript. The introduction of a self-cleaving ribozyme derived from hepatitis delta virus to the 3' end of the transcribed saiRNA dramatically improves its silencing activity by generating a short 3' overhang that facilitates the efficient binding of saiRNA to Ago2. The same ribozyme also enhances the activity of Dicer-dependent shRNAs. Unlike a classical shRNA, the strand-specific cleavage of saiRNA by Ago2 during processing eliminates the passenger strand and prevents the association of siRNA with non-nucleolytic Ago proteins. As a result, off-target effects are reduced. In addition, saiRNA exhibits less competition with the biogenesis of endogenous miRNAs. Therefore, ribozyme-enhanced saiRNA provides a reliable tool for RNA interference applications.