The focus of our work is the gypsy chromatin insulator of Drosophila, the best studied chromatin insulator to date. The gypsy insulator is comprised of a DNA sequence bound by a complex of at least three proteins. Several lines of evidence suggest that insulator proteins bridge distant DNA sequences dispersed throughout the genome, causing looping of the DNA and the creation of a distinct chromatin domain. Nuclear aggregates of insulator complexes termed insulator bodies are tethered stably to the nuclear matrix and may form higher order structures of chromatin loops. Interestingly, insulator body association with the nuclear scaffold can be disrupted by RNase A treatment. These findings prompted us to examine whether RNA silencing, an RNA-dependent cellular mechanism of gene regulation known to act on the level of chromatin, affects gypsy insulator activity. Our research provides evidence for a previously unknown role for RNA silencing in gypsy insulator function as well as higher order chromatin organization. Using biochemical purification techniques, we have identified an RNA-dependent physical interaction between proteins required for proper gypsy insulator and RNA silencing function. Furthermore, mutations in genes encoding RNA silencing components affect gypsy insulator activity in vivo and the formation of insulator bodies. These results suggest that RNAs involved in the RNA silencing pathway are responsible for the multimerization of insulator complexes and/or the ability of insulator bodies to interact with a nuclear scaffold. Our current efforts center on identifying RNAs associated with the gypsy insulator and gaining mechanistic insight into how the RNA silencing machinery participates in gypsy insulator function using both biochemical and genetic approaches.