Viroids are small, circular RNA pathogens, which infect several crop plants and can cause diseases of economic importance. They do not code for proteins but they contain a number of RNA structural elements, which interact with factors of the host. The resulting set of sophisticated and specific interactions enables them to use the host machinery for their replication and transport, circumvent its defence reactions and alter its gene expression. Although found in plants, viroids have a distant relative in the animal world: hepatitis delta virus (HDV), a satellite virus of hepatitis B virus, which has a similar rod-like structure and replicates in the nucleus of infected cells. Viroids have also a cellular relative: the retroviroids, found in some plants as independent (non-infectious) RNA replicons with a DNA copy. In this review, we summarize recent progress in understanding viroid biology. We discuss the possible role of recently identified viroid-binding host proteins as well as the recent data on the interaction of viroids with one part of the host's defence machinery, the RNA-mediated gene silencing and how this might be connected to viroid replication and pathogenicity.