Large blocks of tandemly repeated DNAs—satellite DNAs (satDNAs)—play important roles in heterochromatin formation and chromosome segregation. We know little about how satDNAs are regulated, however their misregulation is associated with genomic instability and human diseases. We use the Drosophila melanogaster germline as a model to study the regulation of satDNA transcription and chromatin. Here we show that complex satDNAs (>100-bp repeat units) are transcribed into long noncoding RNAs and processed into piRNAs (PIWI interacting RNAs). This satDNA piRNA production depends on the Rhino-Deadlock-Cutoff complex and the transcription factor Moonshiner—a previously-described non-canonical pathway that licenses heterochromatin-dependent transcription of dual-strand piRNA clusters. We show that this pathway is important for establishing heterochromatin at satDNAs. Therefore, satDNAs are regulated by piRNAs originating from their own genomic loci.  This novel mechanism of satDNA regulation provides insight into the role of piRNA pathways in heterochromatin formation and genome stability.

Highly-repetitive satellite DNA (satDNA) repeats are found in most eukaryotic genomes. SatDNAs are rapidly evolving and have roles in genome stability and chromosome segregation. Their repetitive nature poses a challenge for genome assembly and makes progress on the detailed study of satDNA structure difficult. Here we use single-molecule sequencing long reads from Pacific Biosciences (PacBio) to determine the detailed structure of all major autosomal complex satDNA loci in Drosophila melanogaster, with a particular focus on the 260-bp and Responder satellites. We determine the optimal de novo assembly methods and parameter combinations required to produce a high quality assembly of these previously unassembled satDNA loci and validate this assembly using molecular and computational approaches. We determined that the computationally intensive PBcR-BLASR assembly pipeline yielded better assemblies than the faster and more efficient pipelines based on the MHAP hashing algorithm, and that it is essential to validate assemblies of repetitive loci. The assemblies reveal that satDNA repeats are organized into large arrays interrupted by transposable elements. The repeats in the center of the array tend to be homogenized in sequence, suggesting that gene conversion and unequal crossovers lead to repeat homogenization through concerted evolution, though the degree of unequal crossing-over may differ among complex satellite loci. We find evidence for higher order structure within satDNA arrays that suggest recent structural rearrangements. These assemblies provide a platform for the evolutionary and functional genomics of satDNAs in pericentric heterochromatin.