In Arabidopsis thaliana, the pathway for transcriptional silencing via RNA-directed DNA methylation and chromatin modification involves two forms of nuclear RNA polymerase IV (pol IVa and pol IVb), RNA-DEPENDENT RNA POLYMERASE2 (RDR2), DICER-LIKE3 (DCL3), ARGONAUTE4 (AGO4), the chromatin remodeler, DRD1, and the de novo cytosine methyltransferase, DRM2. New insight into the order of events, as well as the spatial organization of this pathway within the nucleus, has come from the combined use of protein immunolocalization, RNA fluorescence in situ hybridization (RNA-FISH), DNA-FISH, and genetic analysis. New findings show that pol IVa, pol IVb, and DRD1 colocalize with DNA loci that are both the sources and targets of small interfering RNAs (siRNAs). However, RDR2-dependent doublestranded RNA production, dicing by DCL3, and loading of siRNAs into AGO4-containing RNA-induced silencing complexes (RISCs) appear to take place at a distant site, in an siRNA processing center located in the nucleolus. This siRNA processing center shares features of Cajal bodies, which are nucleolus-associated entities involved in the processing and trafficking of RNAs found in ribonucleoprotein (RNP) complexes that splice or modify mRNA, rRNA, or telomeres. Therefore, assembly and trafficking of chromatin-modifying RISCs may share similarities with other nuclear RNPs.