Long noncoding RNAs are implicated in a number of regulatory functions in eukaryotic genomes. The paternally expressed long noncoding RNA (ncRNA)Kcnq1ot1 regulates epigenetic gene silencing in an imprinted gene cluster in cis over a distance of 400 kb in the mouse embryo, whereas the silenced region extends over 780 kb in the placenta. Gene silencing by the Kcnq1ot1 RNA involves repressive histone modifications, including H3K9me2 and H3K27me3,which are partly brought about by the G9a and Ezh2 histone methyltransferases. Here, we show that Kcnq1ot1 is transcribed by RNA polymerase II, is unspliced,is relatively stable and is localised in the nucleus. Analysis of conditional Dicer mutants reveals that the RNAi pathway is not involved in gene silencing in the Kcnq1ot1 cluster. Instead, using RNA/DNA FISH we show that the Kcnq1ot1 RNA establishes a nuclear domain within which the genes that are epigenetically inactivated in cis are frequently found, whereas nearby genes that are not regulated by Kcnq1ot1 are localised outside of the domain. The Kcnq1ot1 RNA domain is larger in the placenta than in the embryo, consistent with more genes in the cluster being silenced in the placenta. Our results show for the first time that autosomal long ncRNAs can establish nuclear domains, which might create a repressive environment for epigenetic silencing of adjacent genes. Long ncRNAs in imprinting clusters and the Xist RNA on the inactive X chromosome thus appear to regulate epigenetic gene silencing by similar mechanisms.