Small-RNA-guided gene regulation is a recurring theme in biology. Animal germ cells are characterized by an intriguing small-RNA-mediated gene-silencing mechanism known as the PIWI pathway. For a long time, both the biogenesis of PIWI-interacting RNAs (piRNAs) as well as their mode of gene silencing has remained elusive. A recent body of work is shedding more light on both aspects and implicates PIWI in the establishment of transgenerational epigenetic states. In fact, the epigenetic states imposed by PIWI on targets may actually drive piRNA production itself. These findings start to couple small RNA biogenesis with small-RNA-mediated epigenetics.