In a number of organisms, transgenes containing transcribed inverted repeats (IRs) that produce hairpin RNA can trigger RNA-mediated silencing, which is associated with 21-24 nucleotide small interfering RNAs (siRNAs). In plants, IR-driven RNA silencing also causes extensive cytosine methylation of homologous DNA in both the transgene "trigger" and any other homologous DNA sequences--"targets". Endogenous genomic sequences, including transposable elements and repeated elements, are also subject to RNA-mediated silencing. The RNA silencing gene ARGONAUTE4 (AGO4) is required for maintenance of DNA methylation at several endogenous loci and for the establishment of methylation at the FWA gene. Here, we show that mutation of AGO4 substantially reduces the maintenance of DNA methylation triggered by IR transgenes, but AGO4 loss-of-function does not block the initiation of DNA methylation by IRs. AGO4 primarily affects non-CG methylation of the target sequences, while the IR trigger sequences lose methylation in all sequence contexts. Finally, we find that AGO4 and the DRM methyltransferase genes are required for maintenance of siRNAs at a subset of endogenous sequences, but AGO4 is not required for the accumulation of IR-induced siRNAs or a number of endogenous siRNAs, suggesting that AGO4 may function downstream of siRNA production.