A 21-base pair RNA duplex that perfectly matches an endogenous target mRNA selectively degrades the mRNA and suppresses gene expression in mammalian tissue culture cells. A single base mismatch with the target is believed to protect the mRNA from degradation, making this type of interference highly specific to the targeted gene. A short RNA with mismatches to a target sequence present in multiple copies in the 3'-untranslated region of an exogenously expressed gene can, however, silence it by translational repression. Here we report that a mismatched RNA, targeted to a single site in the coding sequence of an endogenous gene, can efficiently silence gene expression by repressing translation. The antisense strand of such a mismatched RNA requires a 5'-phosphate but not a 3'-hydroxyl group. G.U wobble base pairing is tolerated as a match for both RNA degradation and translation repression. Together, these findings suggest that a small inhibitory RNA duplex can suppress expression of off-target cellular proteins by RNA degradation or translation repression. Proper design of experimental small inhibitory RNAs or a search for targets of endogenous micro-RNAs must therefore take into account that these short RNAs can affect expression of cellular genes with as many as 3-4 base mismatches and additional G.U mismatches.