Dosage compensation mechanisms in flies and mammals provide an exquisite example of chromatin associated RNAs in chromosome-wide transcription regulation. Recent progress shows that chromatin modifications are also closely linked to these processes. Concerted action of the RNA/chromatin-modifying enzymes may play a crucial role in determining transcriptional output. Furthermore, non-coding RNAs appear to play a dual role, being targeting modules as well as encoding for target sites for complex recognition.