RNA interference (RNAi) is a simple and powerful tool widely used to study gene functions in many species. Vector-based systems using RNA polymerase III promoters have been developed to achieve stable expression of small interfering RNA (siRNA) or small hairpin RNA (shRNA) in mammalian cells. Recent investigations demonstrated that when, combined with the Cre-loxP system, the vector-based RNAi can be used to achieve conditional or tissue specific knockdown of endogenous genes with high efficiency in mice. Here, we review these recent progresses and discuss the advantages, limitations and future development of this emerging technology.