Small activating RNAs (saRNAs) are short double-stranded oligonucleotides that selectively increase gene transcription. Here, we describe the development of an saRNA that upregulates the transcription factor CCATT/enhancer binding protein alpha (CEBPA), investigate its mode of action, and describe its development into a clinical candidate. A bioinformatically directed nucleotide walk around the CEBPA gene identified an saRNA sequence that upregulates CEBPA mRNA 2.5-fold in human hepatocellular carcinoma cells. A nuclear run-on assay confirmed that this upregulation is a transcriptionally driven process. Mechanistic experiments demonstrate that Argonaute-2 (Ago2) is required for saRNA activity, with the guide strand of the saRNA shown to be associated with Ago2 and localized at the CEBPA genomic locus using RNA chromatin immunoprecipitation (ChIP) assays. The data support a sequence-specific on-target saRNA activity that leads to enhanced CEBPA mRNA transcription. Chemical modifications were introduced in the saRNA duplex to prevent activation of the innate immunity. This modified saRNA retains activation of CEBPA mRNA and downstream targets and inhibits growth of liver cancer cell lines in vitro. This novel drug has been encapsulated in a liposomal formulation for liver delivery, is currently in a phase I clinical trial for patients with liver cancer, and represents the first human study of an saRNA therapeutic.