Vault particles are conserved organelles implicated in multidrug resistance and intracellular transport. They contain three different proteins and non-coding vault RNAs (vRNAs). Here we show that human vRNAs produce several small RNAs (svRNAs) by mechanisms different from those in the canonical microRNA (miRNA) pathway. At least one of these svRNAs, svRNAb, associates with Argonaute proteins to guide sequence-specific cleavage and regulate gene expression similarly to miRNAs. We demonstrate that svRNAb downregulates CYP3A4, a key enzyme in drug metabolism. Our findings expand the repertoire of small regulatory RNAs and assign, for the first time, a function to vRNAs that may help explain the association between vault particles and drug resistance.