Small RNAs have several important biological functions. MicroRNAs (miRNAs) and trans-acting small interfering RNAs (tasiRNAs) regulate mRNA stability and translation, and siRNAs cause post-transcriptional gene silencing of transposons, viruses and transgenes and are important in both the establishment and maintenance of cytosine DNA methylation. Here, we study the role of the four Arabidopsis thaliana DICER-LIKE genes (DCL1-DCL4) in these processes. Sequencing of small RNAs from a dcl2 dcl3 dcl4 triple mutant showed markedly reduced tasiRNA and siRNA production and indicated that DCL1, in addition to its role as the major enzyme for processing miRNAs, has a previously unknown role in the production of small RNAs from endogenous inverted repeats. DCL2, DCL3 and DCL4 showed functional redundancy in siRNA and tasiRNA production and in the establishment and maintenance of DNA methylation. Our studies also suggest that asymmetric DNA methylation can be maintained by pathways that do not require siRNAs.