The significance of noncoding RNAs in animal biology is being increasingly recognized. The nematode Caenorhabditis elegans has an extensive system of short RNAs that includes microRNAs, piRNAs, and endogenous siRNAs, which regulate development, control life span, provide resistance to viruses and transposons, and monitor gene duplications. Progress in our understanding of short RNAs was stimulated by the discovery of RNA interference, a phenomenon of sequence-specific gene silencing induced by exogenous double-stranded RNA, at the turn of the twenty-first century. This chapter provides a broad overview of the exogenous and endogenous RNAi processes in C. elegans and describes recent advances in genetic, genomic, and molecular analyses of nematode's short RNAs and proteins involved in the RNAi-related pathways.