Research using ciliates revealed early examples of epigenetic phenomena and continues to provide novel findings. These protozoans maintain separate germline and somatic nuclei that carry transcriptionally silent and active genomes, respectively. Examining the differences in chromatin within distinct nuclei of Tetrahymena identified histone variants and established that transcriptional regulators act by modifying histones. Formation of somatic nuclei requires both transcriptional activation of silent chromatin and large-scale DNA elimination. This somatic genome remodeling is directed by homologous RNAs, acting with an RNA interference (RNAi)-related machinery. Furthermore, the content of the parental somatic genome provides a homologous template to guide this genome restructuring. The mechanisms regulating ciliate DNA rearrangements reveal the surprising power of homologous RNAs to remodel the genome and transmit information transgenerationally.