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Small RNAs, such as small interfering RNAs (siRNAs) or microRNAs (miRNAs), regulate gene expression at transcriptional and posttranscriptional levels in eukaryotes. miRNAs are processed from duplexes formed on single-stranded RNA. They regulate expression of their target gene either by cleaving mRNA or supressing translation. In general, the primary miRNA transcripts are synthesized by RNA polymerase II and processed similarly to mRNAs. MIRNA genes are usually located in transcriptionally active euchromatic regions. In contrast, siRNAs are processed from duplexes made of two RNA molecules. One of them is often derived from a transposable element (TE) or from repetitive sequences that reside in heterochromatic regions. The other strand is synthesized by the RNA-dependent RNA polymerase on the first strand as a template. siRNAs establish epigenetic marks in parasitic DNA such as TEs, thus they usually act in cis. The rice miRNA miR820, encoded by CACTA TEs (five copies, located on different chromosomes), reduces the expression of the de novo DNA methyltransferase gene OsDRM2. Because miR820 is derived from silent TEs, in which the heterochromatic histone modifications are enriched, the mechanism of MIR820 transcription could be expected to differ from typical miRNAs. Here we show that the primary transcript of MIR820 is mainly derived from the CACTA TE copy on chromosome 7 (MIR820b). Histone modification and DNA methylation status around MIR820b differed from that of the other four loci. These unique epigenetic modifications in MIR820b were only found around the miR820 coding region. We conclude that MIR820b transcription may depend on the unique epigenetic modifications, which in turn may be established by the action of miR820 in cis. This suggests a dual function of miR820 in cis and in trans.

Expression of the rice microRNA <i>miR820</i> is associated with epigenetic modifications at its own locus