Recent studies have uncovered extensive presence and functions of small noncoding RNAs in gene regulation in eukaryotes. In particular, RNA interference (RNAi) has been the subject of significant investigations for its unique role in post-transcriptional gene regulation and utility as a tool for artificial gene knockdown. Here, we describe a novel strategy for post-transcriptional gene regulation in mammalian cells in which RNAi is specifically modulated through RNA aptamer-small molecule interaction. Incorporation of an RNA aptamer for theophylline in the loop region of a short hairpin RNA (shRNA) designed to silence fluorescent reporter genes led to dose-dependent inhibition of RNAi by theophylline. shRNA cleavage experiments using recombinant Dicer demonstrated that theophylline inhibited cleavage of an aptamer-fused shRNA by Dicer in vitro. Inhibition of siRNA production by theophylline was also observed in vivo. The results presented here provide the first evidence of specific RNA-small molecule interaction affecting RNAi, and a novel strategy to regulate mammalian gene expression by small molecules without engineered proteins.