Small RNA molecules of about 20–30 nucleotides have emerged as powerful regulators of gene expression and genome stability. Studies in fission yeast and multicellular organisms suggest that effector complexes, directed by small RNAs, target nascent chromatin-bound non-coding RNAs and recruit chromatin-modifying complexes. Interactions between small RNAs and nascent non-coding transcripts thus reveal a new mechanism for targeting chromatin-modifying complexes to specific chromosome regions and suggest possibilities for how the resultant chromatin states may be inherited during the process of chromosome duplication.