Heterochromatic gene silencing at the pericentromeric DNA repeats in fission yeast requires the RNA interference (RNAi) machinery. The RNA-induced transcriptional silencing (RITS) complex mediates histone H3 lysine 9 (H3K9) methylation and recruits the RNA-dependent RNA polymerase complex (RDRC) to promote double-stranded RNA (dsRNA) synthesis and siRNA generation. Here we show that ectopic expression of a long hairpin RNA bypasses the requirement for chromatin-dependent steps in siRNA generation. The ability of hairpin-produced siRNAs to silence homologous sequences in trans is subject to local chromatin structure, requires HP1, and correlates with antisense transcription at the target locus. Furthermore, although hairpin siRNAs can be produced in the absence of RDRC, trans-silencing of reporter genes by hairpin-produced siRNAs is completely dependent on the dsRNA synthesis activity of RDRC. These results provide insights into the regulation of siRNA action and reveal roles for cis-dsRNA synthesis and HP1 in siRNA-mediated heterochromatin assembly.