Active suppression of T lymphocyte activation can limit the efficacy of immune surveillance and immunotherapy. Here we have explored the possibility of designing bifunctional small interfering RNAs (siRNAs) capable of inducing innate immunity through Toll-like receptors and simultaneously inhibiting the expression of immunosuppressive factors. Using interleukin (IL) 10 as a model, we found that liposomal delivery of IL10 siRNAs could efficiently activate the expression of cytokines (e.g. TNF-alpha, IL6, and IL12) and interferons (e.g. IFN-alpha) in peripheral blood mononuclear cells (PBMCs) and immature monocyte-derived dendritic cells (iMoDCs). Moreover, the designed siRNAs inhibited IL10 gene expression. Transfection of iMoDCs with either chemically or in vitro transcribed IL10 siRNAs induced their differentiation into mature MoDCs (mMoDCs) characterized by the expression of costimulatory molecules CD80/CD86 and the chemokine receptor CCR7. Lipid delivery of either chemically synthesized or T7-transcribed immunostimulatory siRNAs induced cytokine production. However, in contrast to chemically synthesized siRNAs, electroporation of in vitro transcribed siRNAs also induced cytokine production in iMoDCs. Interestingly, IL10 siRNA-transfected iMoDCs were capable for enhancing the response of allogeneic T cells, providing support for the rational design of bifunctional siRNAs as immune modulating therapy.