The flavonoid pigment pathway in plants has been used as a model system for studying gene regulatory mechanisms. C2-Idf is a stable dominant mutation of the chalcone synthase gene, c2, which encodes the first dedicated enzyme in this biosynthetic pathway of maize. Homozygous C2-Idf plants show no pigmentation. This allele also inhibits expression of functional C2 alleles in heterozygotes, producing a less pigmented condition instead of the normal deeply pigmented phenotype. To explore the nature of this effect, the C2-Idf allele was cloned. The gene structure of the C2-Idf haplotype differs substantially from that of the normal c2 gene in that three copies are present. Two of these are located in close proximity to each other in a head-to-head orientation and the third is closely linked. Previous experiments showed that the lower level of pigmentation in heterozygotes is correlated with reduced enzyme activity and low steady-state mRNA levels. We found that c2 transcription occurs in nuclei of C2-Idf/C2 heterozygotes, but mRNA does not accumulate, suggesting that the inhibition is mediated by RNA silencing. Infection of C2-Idf/C2 heterozygotes with viruses that carry suppressors of RNA silencing relieved the phenotypic inhibition, restoring pigment production and mRNA levels. Finally, we detected small interfering RNAs (siRNAs) in plants carrying C2-Idf, but not in plants homozygous for the wild-type C2 allele. Together, our results indicate that the inhibitory effect of C2-Idf occurs through RNA silencing.