We previously demonstrated a case of silencing in transgenic plants expressing T7 RNA polymerase in which expression of a reporter gene placed under the control of the T7 promoter was silenced. Here we demonstrate that endogenous genes can be silenced by the same system. The T7-driven silencing system does not conform to several aspects characteristic of post-transcriptional RNA silencing in plants, and this prompted an investigation into the mechanisms underlying this type of silencing. The present paper demonstrates that T7-driven silencing is a post-transcriptional process that is restricted to the nucleus. Nuclear run-on assays indicated the presence of silenced gene transcripts in both orientations. SiRNA corresponding to the silenced gene could not be traced in the cytoplasm but was found in nuclei. The silenced gene was hypermethylated. We present evidence that a tobacco RNA-dependent RNA polymerase (RdRP) is not involved in T7-mediated silencing, but indicate the involvement of a nuclear RdRP in this type of silencing.