Short interfering RNAs (siRNAs) are a class of regulatory effectors that enforce gene silencing through formation of RNA duplexes. Although progress has been made in identifying the capabilities of siRNAs in silencing foreign RNA and transposable elements, siRNA functions in endogenous gene regulation have remained mysterious. In certain organisms, siRNA biosynthesis involves novel enzymes that act as RNA-directed RNA polymerases (RdRPs). Here we analyze the function of a Caenorhabditis elegans RdRP, RRF-3, during spermatogenesis. We found that loss of RRF-3 function resulted in pleiotropic defects in sperm development and that sperm defects led to embryonic lethality. Notably, sperm nuclei in mutants of either rrf-3 or another component of the siRNA pathway, eri-1, were frequently surrounded by ectopic microtubule structures, with spindle abnormalities in a subset of the resulting embryos. Through high-throughput small RNA sequencing, we identified a population of cellular mRNAs from spermatogenic cells that appear to serve as templates for antisense siRNA synthesis. This set of genes includes the majority of genes known to have enriched expression during spermatogenesis, as well as many genes not previously known to be expressed during spermatogenesis. In a subset of these genes, we found that RRF-3 was required for effective siRNA accumulation. These and other data suggest a working model in which a major role of the RRF-3/ERI pathway is to generate siRNAs that set patterns of gene expression through feedback repression of a set of critical targets during spermatogenesis.