Abundant ϳ28-nucleotide RNAs that are thought to direct histone H3 lysine 9 (H3K9) methylation and promote the elimination of nearly 15 Mbp of DNA from the developing somatic genome are generated during Tetrahymena thermophila conjugation. To identify the protein(s) that generates these small RNAs, we studied three Dicer-related genes encoded within the Tetrahymena genome, two that contain both RNase III and RNA helicase motifs, Dicer 1 (DCR1) and DCR2, and a third that lacks the helicase domain, Dicer-like 1 (DCL1). DCL1 is expressed upon the initiation of conjugation, and the protein localizes to meiotic micronuclei when bidirectional germ line transcription occurs and small RNAs begin to accumulate. Cells in which we disrupted the DCL1 gene (⌬DCL1) grew normally and initiated conjugation as wild-type cells but arrested near the end of development and eventually died, unable to resume vegetative growth. These ⌬DCL1 cells failed to generate the abundant small RNAs but instead accumulated germ line-limited transcripts. Together, our findings demonstrate that these transcripts are the precursors of the small RNAs and that DCL1 performs RNA processing within the micronucleus. Postconjugation ⌬DCL1 cells die without eliminating the germ linelimited DNA sequences from their newly formed somatic macronuclei, a result that shows that this Dicerrelated gene is required for programmed DNA rearrangements. Surprisingly, ⌬DCL1 cells were not deficient in overall H3K9 methylation, but this modification was not enriched on germ line-limited sequences as it is in wild-type cells, which clearly demonstrates that these small RNAs are essential for its targeting to specific loci.RNA interference (RNAi) describes an array of related mechanisms involved in diverse biological processes including defense against RNA viruses, specification of centromeric heterochromatin structure, and developmental control of gene expression (reviewed in reference 25). These mechanisms share the use of small RNAs to target specific effector protein complexes to homologous sequences via base-pairing interactions. The use of small, homologous RNAs as specificity factors imparts tremendous flexibility of targets on a single protein complex. These targeting RNAs are generated by RNase III enzymes, collectively called Dicer ribonucleases, that cleave longer, double-stranded RNA (dsRNA) into ϳ20-to 26-nucleotide (nt) species that are incorporated into the effector complexes (3, 24, 27, 30; reviewed in reference 6). The genomes of many eukaryotes encode multiple Dicer-related proteins, and the specific Dicer used to generate the small RNAs can determine the downstream pathway that they enter. For instance, in Arabidopsis thaliana, the Dicer-like 3 (Dcl3) gene product is required to produce endogenous short interfering RNAs (siRNAs), A. thaliana Dcl2 is necessary for accumulation of siRNAs in response to RNA virus infections, and A. thaliana Dcl1 is necessary to generate micro-RNAs (miRNAs) involved in the control of flower development (31,53). Similarly, th...