Non-coding RNAs (ncRNAs) play a significant role in the control of gene expression and epigenetic regulation. It seems that ncRNAs might be numerous and highly adapted in roles that require specific nucleic acid recognition without complex catalysis, such as in guiding RNA modifications or in directing post-transcriptional regulation of gene expression and chromatin structure. Our previous work has revealed that NoRC, a chromatin remodeling complex that triggers heterochromatin formation and transcriptional silencing of a fraction of rRNA genes, is associated with 100-250 nt RNAs that originate from the intergenic spacer (IGS) separating rDNA repeats. Furthermore, a fraction of rDNA is transcribed in antisense orientation. Both IGS RNA and antisense transcripts display a growth- and tissue-specific expression pattern. The goal of this project is to decipher the role of NoRC-associated RNA in alterations of chromatin structure and epigenetic control of rDNA. Our research will focus on the synthesis, regulation, and processing of intergenic and antisense transcripts in response to cell growth and differentiation as well as on the role of NoRC-associated RNA in epigenetic regulation of rRNA genes. The following points will be addressed: (1) Deciphering the mechanism underlying RNA-directed establishment of specific epigenetic marks and formation of silent chromatin domains, (2) Functional analysis of posttranscriptional modifications that regulate RNA binding and NoRC activity, (3) Identification of non-ribosomal target genes of NoRC, and (4) Elucidation of the link between transcriptional activity and active demethylation of the rDNA promoter. Given the fact that basic regulatory principles are conserved throughout evolution, this work will have a great impact on our understanding of RNA-directed silencing mechanisms and will reveal how epigenetic defects cause human diseases.