RNA interference (RNAi) is an evolutionarily conserved process that silences gene expression through double-stranded RNA species in a sequence-specific manner. With the completion of genome sequencing in multiple organisms, RNAi provides an efficient reverse genetics tool to reveal gene functions on a genome-wide scale. Conditional/inducible RNAi offers a new way to analyze gene function at different developmental stages and to create a new generation of animal models of human diseases. The sequence-specificity of RNAi and the fact that it is a naturally occurring process in human make it an excellent therapeutic tool for a wide range of diseases. This article provides a brief review of the current understandings of the mechanism of RNAi and its application to the nervous system, with particular focus on its application to understand mechanisms of neurodegenerative diseases. The prospects of the application of RNAi in clinical setting to treat these devastating diseases will also be presented.