Small RNAs regulate chromatin modifications such as DNA methylation and gene silencing across eukaryotic genomes. In plants, RNA-directed DNA methylation (RdDM) requires 24-nucleotide small interfering RNAs (siRNAs) that bind to ARGONAUTE 4 (AGO4) and target genomic regions for silencing. RdDM also requires non-coding RNAs transcribed by RNA polymerase V (Pol V) that probably serve as scaffolds for binding of AGO4-siRNA complexes. Here, we used a modified global nuclear run-on protocol followed by deep sequencing to capture Pol V nascent transcripts genome-wide. We uncovered unique characteristics of Pol V RNAs, including a uracil (U) common at position 10. This uracil was complementary to the 5' adenine found in many AGO4-bound 24-nucleotide siRNAs and was eliminated in a siRNA-deficient mutant as well as in the ago4/6/9 triple mutant, suggesting that the +10 U signature is due to siRNA-mediated co-transcriptional slicing of Pol V transcripts. Expression of wild-type AGO4 in ago4/6/9 mutants was able to restore slicing of Pol V transcripts, but a catalytically inactive AGO4 mutant did not correct the slicing defect. We also found that Pol V transcript slicing required SUPPRESSOR OF TY INSERTION 5-LIKE (SPT5L), an elongation factor whose function is not well understood. These results highlight the importance of Pol V transcript slicing in RNA-mediated transcriptional gene silencing, which is a conserved process in many eukaryotes.