In recent years, a bevy of evidence has been unearthed indicating that 'silent' heterochromatin is not as transcriptionally inert as once thought. In the unicellular yeast Schizosaccharomyces pombe, the processing of transcripts derived from centromeric repeats into homologous short interfering RNA (siRNA) is essential for the formation of centromeric heterochromatin. Deletion of genes required for siRNA biogenesis showed that core components of the canonical RNA interference (RNAi) pathway are essential for centromeric heterochromatin assembly as well as for centromere function. Subsequent purification of the RNA-induced initiation of transcriptional gene silencing (RITS) complex provided the critical link between siRNAs and heterochromatin assembly, with RITS acting as a physical bridge between noncoding RNA scaffolds and chromatin. Here, we review current understanding of how RITS promotes heterochromatin formation and how it participates in transcription-coupled silencing. WIREs RNA 2011 2 632-646 DOI: 10.1002/wrna.80 For further resources related to this article, please visit the WIREs website.