Considerable effort has been devoted to the characterization of RNA interference (RNAi), a posttranscriptional gene silencing mechanism involving small RNA-containing effector complexes. Recent studies have revealed that components of the RNAi machinery are associated not only with target RNA cleavage and impairment of target RNA translation but also with the formation of heterochromatin. There is increasing evidence that RNA-mediated chromatin modifications play an important role in epigenetic transcriptional gene silencing.