A link between the RNAi system and heterochromatin formation has been established in several model organisms including Schizosaccharomyces pombe and Arabidopsis thaliana. However, the data to support a role for small RNAs and the associated machinery in transcriptional gene silencing in animal systems is more tenuous. Using the S. pombe system as a model, we analyze the role of small RNA pathway components and associated small RNAs in regulating transposable elements and potentially directing heterochromatin formation at these elements in Drosophila melanogaster.