Small interfering RNAs (siRNA) are potent reagents for directed post-transcriptional gene silencing and a major new genetic tool for investigating mammalian cells. When synthetic siRNAs are used for gene silencing, the costs can be substantial because of variations in siRNA efficacies. An alternative to chemically synthesized siRNAs are siRNAs produced by bacteriophage T7 RNA polymerase. We found that siRNAs synthesized from the T7 RNA polymerase system can trigger a potent induction of interferon alpha and beta in a variety of cell lines. Surprisingly, we also found very potent induction of interferon alpha and beta by short single-stranded RNAs (ssRNAs) transcribed with T3, T7 and Sp6 RNA polymerases. Analyses of the potential mediators of this response revealed that the initiating 5' triphosphate is required for interferon induction. We describe here an improved method for T7 siRNA synthesis that alleviates the interferon response while maintaining full efficacy of the siRNAs.