In plants, transgenes containing Potato spindle tuber viroid (PSTVd) cDNA sequences were efficient targets of PSTVd infection-mediated RNA-directed DNA methylation. Here, we demonstrate that in PSTVd-infected tobacco plants, a 134 bp PSTVd fragment (PSTVd-134) did not become densely methylated when it was inserted into a chimeric Satellite tobacco mosaic virus (STMV) construct. Only about 4-5% of all cytosines (Cs) of the PSTVd-134 were methylated when flanked by satellite sequences. In the same plants, C methylation was approximately 92% when the PSTVd-134 was in a PSTVd full length sequence context and roughly 33% when flanked at its 3' end by a 19 bp PSTVd and at its 5' end by a short viroid-unrelated sequence. In addition, PSTVd small interfering RNAs (siRNAs) produced from the replicating viroid failed to target PSTVd-134-containing chimeric STMV RNA for degradation. Satellite RNAs appear to have adopted secondary structures that protect them against RNA interference (RNAi)-mediated degradation. Protection can be extended to short non-satellite sequences residing in satellite RNAs, rendering them poor targets for nuclear and cytoplasmic RNAi induced in trans.