Centromeric silencing and heterochromatin formation in Schizosaccharomyces pombe require the RNA interference (RNAi) machinery. Three factors that mediate this mechanism have been identified: 1) the RNA-dependent RNA polymerase complex RdRC, 2) the Argonaute-containing RITS (RNA-induced initiation of transcriptional silencing) complex, and 3) the endoribonuclease Dicer ortholog Dcr1. S. pombe mutants lacking a new factor described here, Ers1, are completely defective in RNAi-dependent silencing of centromeric regions but, importantly, not in RNAi-independent silencing at the mat3M or tel2R loci. ers1Delta cells likewise fail to convert centromeric pre-small interfering RNA transcripts into small interfering RNAs, are defective in histone H3 Lys(9) methylation, and are unable to recruit the RITS complex to centromeric sequences. Surprisingly, Ers1 lacks obvious orthologs outside of the genus Schizosaccharomyces. Within this group, it is diverging rapidly, raising the possibility that it is coevolving with target RNA elements.