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Small interfering RNAs (siRNAs) are short, double-stranded RNAs that use the endogenous RNAi pathway to mediate gene silencing. Phosphorylation facilitates loading of a siRNA into the Ago2 complex and subsequent cleavage of the target mRNA. In this study, 2', 3' seco nucleoside modifications, which contain an acylic ribose ring and are commonly called unlocked nucleic acids (UNAs), were evaluated at all positions along the guide strand of a siRNA targeting apolipoprotein B (ApoB). UNA modifications at positions 1, 2 and 3 were detrimental to siRNA activity. UNAs at positions 1 and 2 prevented phosphorylation by Clp1 kinase, abrogated binding to Ago2, and impaired Ago2-mediated cleavage of the mRNA target. The addition of a 5'-terminal phosphate to siRNA containing a position 1 UNA restored ApoB mRNA silencing, Ago2 binding, and Ago2 mediated cleavage activity. Position 1 UNA modified siRNA containing a 5'-terminal phosphate exhibited a partial restoration of siRNA silencing activity in vivo. These data reveal the complexity of interpreting the effects of chemical modification on siRNA activity, and exemplify the importance of using multiple biochemical, cell-based and in vivo assays to rationally design chemically modified siRNA destined for therapeutic use.