Heterochromatic regions of the genome are epigenetically regulated to maintain a heritable '"silent state"'. In fission yeast and other organisms, epigenetic silencing is guided by nascent transcripts, which are targeted by the RNA interference pathway. The key effector complex of the RNA interference pathway consists of small interfering RNA molecules (siRNAs) associated with Argonaute, assembled into the RNA-induced transcriptional silencing (RITS) complex. This review focuses on our current understanding of how RITS promotes heterochromatin formation, and in particular on the role of Argonaute-containing complexes in many other functions such as quelling, release of RNA polymerases, cellular quiescence and genome defense.