Plant genomes produce a variety of small RNAs that function in distinct, yet overlapping, genetic and epigenetic silencing pathways. However, the abundance and diversity of small RNA classes varies in different plant species, suggesting co-evolution between environmental adaptations and gene silencing mechanisms. Small RNA biogenesis in plants is well understood, but we are just beginning to uncover their intricate regulation and activity. Here, we discuss the biogenesis of plant small RNAs, such as microRNAs, secondary small-interfering RNAs and heterochromatic small-interfering RNAs, and their diverse cellular and developmental functions, including reproductive transitions, genomic imprinting and paramutation. We also discuss the diversification of small RNA-directed silencing pathways through the expansion of RNA-dependent RNA polymerases, Dicer and Argonaute proteins.