Small RNAs, including small interfering RNAs (siRNA) and microRNAs (miRNA), are emerging as promising therapeutic drugs against a wide array of diseases. The key obstacle for the successful clinical application of small RNAs is to develop a safe delivery system directed at the target tissues only. Current small RNA transfer techniques use viruses or synthetic agents as delivery vehicles. The replacement of these delivery vehicles with a low toxicity and high target-specific approach is essential for making small RNA therapy feasible. Because exosomes have the intrinsic ability to traverse biological barriers and to naturally transport functional small RNAs between cells, they represent a novel and exciting delivery vehicle for the field of small RNA therapy. As therapeutic delivery agents, exosomes will potentially be better tolerated by the immune system because they are natural nanocarriers derived from endogenous cells. Furthermore, exosomes derived from genetically engineered cells can deliver small RNAs to target tissues and cells. Thus, exosome-based delivery of small RNAs may provide an untapped, effective delivery strategy to overcome impediments such as inefficiency, nonspecificity, and immunogenic reactions. In this review, we briefly describe how exosomal small RNAs function in recipient cells. Furthermore, we provide an update and overview of new findings that reveal the potential applications of exosome-based small RNA delivery as therapeutics in clinical settings. WIREs RNA 2016, 7:758-771. doi: 10.1002/wrna.1363 For further resources related to this article, please visit the WIREs website.