Small RNAs of 20-30 nucleotides guide regulatory processes at the DNA or RNA level in a wide range of eukaryotic organisms. Many, although not all, small RNAs are processed from double-stranded RNAs or single-stranded RNAs with local hairpin structures by RNase III enzymes and are loaded into argonaute-protein-containing effector complexes. Many eukaryotic organisms have evolved multiple members of RNase III and the argonaute family of proteins to accommodate different classes of small RNAs with specialized molecular functions. Some small RNAs cause transcriptional gene silencing by guiding heterochromatin formation at homologous loci, whereas others lead to posttranscriptional gene silencing through mRNA degradation or translational inhibition. Small RNAs are not only made from and target foreign nucleic acids such as viruses and transgenes, but are also derived from endogenous loci and regulate a multitude of developmental and physiological processes. Here I review the biogenesis and function of three major classes of endogenous small RNAs in plants: microRNAs, trans-acting siRNAs, and heterochromatic siRNAs, with an emphasis on the roles of these small RNAs in developmental regulation.