OBJECTIVE To develop an effective report gene system to test the effect of small interfering RNA (siRNA). METHODS HBV S gene was fused with enhanced green fluorescent protein (EGFP) gene to form HBs-GFP and the plasmid containing HBs-GFP was constructed. A vector expressing small hairpin RNA (shRNA) pAVU6 + 4sh357 was also constructed. Two plasmids were co-transfected into HepG2 cells transiently. The fluorescence of HBs-GFP was detected by fluorescence-activated cell sorting (FACS). The mRNA expression in HepG2 cells was detected by conventional RT-PCR and real-time PCR. RESULTS siRNA inhibited the expression of HBs-GFP 72 hours post transfection. The fluorescence of HBs-GFP in HepG2 cells treated with pAVU6+4sh357 was reduced by 55.4% compared with that of controls. The HBs-GFP expression in HepG2 cells treated with pAVU6+4sh357 was reduced by 76.3% and 90% as measured with conventional RT-PCR and real-time PCR, respectively. CONCLUSION This investigation demonstrated siRNA derived from shRNA expression vectors can inhibit the expression of HBs-GFP in HepG2 cells.