Viroid infection is associated with the production of short interfering RNAs (siRNAs), a hallmark of post-transcriptional gene silencing (PTGS). However, viroid RNAs autonomously replicating in the nucleus have not been shown to trigger the degradation of homologous RNA in the cytoplasm. To investigate the potential of viroids for the induction of gene silencing, non-infectious fragments of potato spindle tuber viroid (PSTVd) cDNA were transcriptionally fused to the 3′ end of the green fluorescent protein (GFP)-coding region. Introduction of such constructs into tobacco plants resulted in stable transgene expression. Upon PSTVd infection, transgene expression was suppressed and partial de novo methylation of the transgene was observed. PSTVd-specific siRNA was detected but none was found corresponding to the gfp gene. Methylation was restricted almost entirely to the PSTVd-specific part of the transgene. Neither a gfp transgene construct lacking viroid-specific elements was silenced nor was de novo methylation detected, when it was introduced into the genetic background of the PSTVd-infected plant lines containing silenced GFP:PSTVd transgenes. The absence of gfp-specific siRNAs and of significant methylation within the gfp-coding region demonstrated that neither silencing nor DNA methylation spread from the initiator region into adjacent 5′ regions.