Gene silencing by RNA interference (RNAi) can be achieved by the ectopic expression of tailored short hairpin RNAs (shRNAs) which after export to the cytoplasm are processed by Dicer and incorporated into the RNA induced silencing complex (RISC). Design rules for shRNAs have been the focus of several studies, but only a few reports have turned the attention to the sequence of the loop-region. In this work we selected high-functional and low-functional shRNA loops from retroviral hairpin-loop-libraries in an RNAi reporter assay. The procedure revealed a very significant and stem sequence-dependent effect of the loop on shRNA function and although neither strong consensus loop sequence nor structural motifs could be identified, a preferred loop sequence (5'-UGUGCUU-3') was found to support robust knock down with little stem sequence dependency. These findings will serve as a guide for designing shRNAs with improved knock down capacity.