Determinants of heterochromatic siRNA biogenesis and function.

Endogenous small interfering RNAs (siRNAs) and other classes of small RNA provide the specificity signals for silencing of transposons and repeated DNA elements at the posttranscriptional and transcriptional levels. However, the determinants that define an siRNA-producing region or control the silencing function of siRNAs are poorly understood. Here we show that convergent antisense transcription and availability of the Dicer ribonuclease are the key determinants for primary siRNA generation. Surprisingly, Dicer makes dual contributions to heterochromatin formation, promoting histone H3 lysine 9 methylation independently of its catalytic activity, in addition to its well-known role in catalyzing siRNA generation. Furthermore, sequences in the 3' UTR of an mRNA-coding gene inhibit the ability of siRNAs to promote heterochromatin formation, providing another layer of control that prevents the silencing of protein-coding RNAs. Our results reveal distinct mechanisms that limit siRNA generation to centromeric DNA repeats and prevent spurious siRNA-mediated silencing at euchromatic loci.