Duplexes of 21-23 nucleotide (nt) RNAs are the sequence-specific mediators of RNA interference (RNAi) and post-transcriptional gene silencing (PTGS). Synthetic, short interfering RNAs (siRNAs) were examined in Drosophila melanogaster embryo lysate for their requirements regarding length, structure, chemical composition and sequence in order to mediate efficient RNAi. Duplexes of 21 nt siRNAs with 2 nt 3' overhangs were the most efficient triggers of sequence-specific mRNA degradation. Substitution of one or both siRNA strands by 2'-deoxy or 2'-O-methyl oligonucleotides abolished RNAi, although multiple 2'-deoxynucleotide substitutions at the 3' end of siRNAs were tolerated. The target recognition process is highly sequence specific, but not all positions of a siRNA contribute equally to target recognition; mismatches in the centre of the siRNA duplex prevent target RNA cleavage. The position of the cleavage site in the target RNA is defined by the 5' end of the guide siRNA rather than its 3' end. These results provide a rational basis for the design of siRNAs in future gene targeting experiments.