RNAi pathways are prevalent throughout the eukaryotic kingdom and are well known to regulate gene expression on a post-transcriptional level in the cytoplasm. Less is known about possible functions of RNAi in the nucleus. In the fission yeast Schizosaccharomyces pombe, RNAi is crucial to establish and maintain centromeric heterochromatin and functions to repress genome activity by a chromatin silencing mechanism referred to as cotranscriptional gene silencing (CTGS). Mechanistic details and the physiological relevance of CTGS are unknown. Here we show that RNAi components interact with chromatin at nuclear pores to keep stress response genes in check. We demonstrate that RNAi-mediated CTGS represses stress-inducible genes by degrading mRNAs under noninduced conditions. Under chronic heat stress conditions, a Dicer thermoswitch deports Dicer to the cytoplasm, thereby disrupting CTGS and enabling expression of genes implicated in the acquisition of thermotolerance. Taken together, our work highlights a role for nuclear pores and the stress response transcription factor Atf1 in coordinating the interplay between the RNAi machinery and the S. pombe genome and uncovers a novel mode of RNAi regulation in response to an environmental cue.