RNA interference (RNAi) by means of short hairpin RNA (shRNA) has developed into a powerful tool for loss-of-function analysis in mammalian cells. The principal problem in RNAi experiments is off-target effects, and the most vigorous demonstration of the specificity of shRNA is the rescue of the RNAi effects with a shRNA-resistant target gene. This presents its own problems, including the unpredictable relative expression of shRNA and rescue cDNA in individual cells, and the difficulty in generating stable cell lines. In this report, we evaluated the plausibility of combining the expression of shRNA and rescue cDNA in the same vector. In addition to facilitate the validation of shRNA specificity, this system also considerably simplifies the generation of shRNA-expressing cell lines. Since the compensatory cDNA is under the control of an inducible promoter, stable shRNA-expressing cells can be generated before the knockdown phenotypes are studied by conditionally turning off the rescue protein. Conversely, the rescue protein can be activated after the endogenous protein is completely repressed. This approach is particularly suitable when prolonged expression of either the shRNA or the compensatory cDNA is detrimental to cell growth. This system allows a convenient one-step validation of shRNA and generation of stable shRNA-expressing cells.