25Retrotransposons are extensively populated in vertebrate genomes, which, when active, 26 are thought to cause genome instability with potential benefit to genome evolution. 27Retrotransposon-derived RNAs are also known to give rise to small endo-siRNAs to help maintain 28 heterochromatin at their sites of transcription; however, as not all heterochromatic regions are 29 equally active in transcription, it remains unclear how heterochromatin is maintained across the 30 genome. Here, we attack these problems by defining the origins of repeat-derived RNAs and their 31 specific chromatin registers in Drosophila S2 cells. We demonstrate that repeat RNAs are 32 predominantly derived from active Gypsy elements, and upon their processing by Dicer-2, these 33 endo-siRNAs act in cis and trans to help maintain pericentromeric heterochromatin. Remarkably, 34we show that synthetic repeat-derived siRNAs are sufficient to rescue Dicer-2 deficiency-induced 35 defects in heterochromatin formation in interphase and chromosome segregation during mitosis, 36 thus demonstrating that active retrotransposons are actually required for stable genetic inheritance. 37 4 amplified by an RNA-dependent RNA polymerase (RdRP). Resultant double-stranded RNAs are 58 next processed by Dicer to produce small interfering RNAs (siRNAs), which are then loaded onto 59 Ago1 to form the RNA-induced transcription silencing (RITS) complex to target nascent repeat 60 RNA. RITS recruits a key histone methyltransferase Clr4 (Su(var)3-9 in flies and SUV39H1 in 61 humans) to generate H3K9me2/3, which then attracts its reader Swi6 (HP1 in flies and humans), 62 together inducing a series of RNA-protein and protein-protein interactions to mediate both initial 63 deposition and spreading of H3K9me2/3 to neighboring sequences (Volpe et al. 2002; Verdel et al. 64 2004). Drosophila melanogaster appears to follow a similar scheme except using the piRNA 65 system to process and amplify repeat-derived RNAs to establish heterochromatin to actively 66 repress retrotransposition in the germline (Vagin et al. 2006;Halic and Moazed 2009; Muerdter et 67 al. 2013;Iwasaki et al. 2015). 68While the general conceptual framework for heterochromatin formation has been well 69 established, there are multiple puzzles that remain to be solved. First, heterochromatin is still 70 dynamic, rather than completely inert, raising the question of how transcription is restarted and 71 whether heterochromatin maintenance depends on local transcription in all regions in need to be 72 patched up. Second, in principle, some repeat-derived RNAs may also be capable of acting in trans, 73 as suggested by a recent analysis of crosstalk between a reporter gene with one copy localized near 74 a pericentromeric region of one chromosome and the other in its native euchromatic context of 75 another chromosome in fission yeast(Yu et al. 2018). However, it remains unclear whether this 76 principle generally applies to heterochromatin maintenance on all pericentromeric regions, and if 77 5 so, what is...