The use of chemically-synthesized short interfering RNAs (siRNAs) is the key method of choice to manipulate gene expression in mammalian cell cultures and in vivo. Several previous studies have aimed at inducing cell-specific RNA interference (RNAi) in order to use siRNA molecules as therapeutic reagents. Here, we used peptide-inhibited siRNAs that were activated after cleavage by cell-specific peptidases. We show that siRNAs with bound peptide at the antisense strand could be activated in target cells and were able to induce RNAi in a cell-specific manner. Green Fluorescent Protein (GFP) and Signal Transducer and Activator of Transcription (STAT)-3 gene expression were selectively reduced in a JEG-3 human choriocarcinoma cell line expressing the activating enzyme caspase-4, whereas the effect was absent in HEK cells which lacked the enzyme. In JEG-3 cells, reduction of STAT3 gene expression by conventional and peptide-inhibited siRNA led to a decrease in cell proliferation. This suggests that peptide-inhibited siRNAs provide improved cell specificity and offers new opportunities for their therapeutic use.