Retinal gene therapy using RNA interference (RNAi) to silence targeted genes requires both efficacy and safety. Short hairpin RNAs (shRNAs) are useful for RNAi, but high expression levels and activity from the co-delivered passenger strand may cause undesirable cellular responses. Ago2-dependent shRNAs (agshRNAs) produce no passenger strand activity. To enhance efficacy and to investigate improvements in safety, we have generated VEGFA-targeting agshRNAs and microRNA (miRNA)-embedded agshRNAs (miR-agshRNAs) and inserted these RNAi effectors in Pol II/III-driven expression cassettes and lentiviral vectors (LVs). Compared with corresponding shRNAs, agshRNAs and miR-agshRNAs increased specificity and safety, while retaining a high knockdown efficacy and abolishing passenger strand activity. The agshRNAs also caused significantly smaller reductions in cell viability and reduced competition with the processing of endogenous miR21 compared with their shRNA counterparts. RNA sequencing (RNA-seq) analysis of LV-transduced ARPE19 cells revealed that expression of shRNAs in general leads to more changes in gene expression levels compared with their agshRNA counterparts and activation of immune-related pathways. In mice, subretinal delivery of LVs encoding tissue-specific miR-agshRNAs resulted in retinal pigment epithelium (RPE)-restricted expression and significant knockdown of Vegfa in transduced RPE cells. Collectively, our data suggest that agshRNAs and miR-agshRNA possess important advantages over shRNAs, thereby posing a clinically relevant approach with respect to efficacy, specificity, and safety.