RNA interference (RNAi) is a collection of small RNA directed mechanisms that result in sequence specific inhibition of gene expression. The notion that RNAi could lead to a new class of therapeutics caught the attention of many investigators soon after its discovery. The field of applied RNAi therapeutics has moved very quickly from lab to bedside. The RNAi approach has been widely used for drug development and several phase I and II clinical trials are under way. However, there are still some concerns and challenges to overcome for therapeutic applications. These include the potential for off-target effects, triggering innate immune responses and most importantly obtaining specific delivery into the cytoplasm of target cells. This review focuses on the current status of RNAi-based therapeutics, the challenges it faces and how to overcome them.