Ciliated protozoan are unicellular eukaryotes. Most species in this diverse group display nuclear dualism, a special feature that supports both somatic and germline nuclei in the same cell. Probably due to this unique life style, they exhibit unusual nuclear characteristics that have intrigued researchers for decades. Among them are large-scale DNA rearrangements, which restructure the somatic genome to become drastically different from its germline origin. They resemble the classical phenomenon of chromatin diminution in some nematodes discovered more than a century ago. The mechanisms of such rearrangements, their biological roles, and their evolutionary origins have been difficult to understand. Recent studies have revealed a clear link to RNA interference, and begin to shed light on these issues. Using the simple ciliate Tetrahymena as a model, this chapter summarizes the physical characterization of these processes, describes recent findings that connect them to RNA interference, and discusses the details of their mechanisms, potential roles in genome defense, and possible occurrences in other organisms.