RNA-Seq is becoming a promising replacement to microarrays in transcriptome profiling and differential gene expression study. Technical improvements have decreased sequencing costs and, as a result, the size and number of RNA-Seq datasets have increased rapidly. However, the increasing volume of data from large-scale RNA-Seq studies poses a practical challenge for data analysis in a local environment. To meet this challenge, we developed Stormbow, a cloud-based software package, to process large volumes of RNA-Seq data in parallel. The performance of Stormbow has been tested by practically applying it to analyse 178 RNA-Seq samples in the cloud. In our test, it took 6 to 8 hours to process an RNA-Seq sample with 100 million reads, and the average cost was $3.50 per sample. Utilizing Amazon Web Services as the infrastructure for Stormbow allows us to easily scale up to handle large datasets with on-demand computational resources. Stormbow is a scalable, cost effective, and open-source based tool for large-scale RNA-Seq data analysis. Stormbow can be freely downloaded and can be used out of box to process Illumina RNA-Seq datasets.