siRNA that participates in Drosophila dosage compensation is produced by many 1.688X and 359 bp repeats.
Organisms with differentiated sex chromosomes must accommodate unequal X-linked gene dosage in males and females. Male fruit flies increase expression from their single X chromosome. Full compensation requires localization of the Male-Specific Lethal (MSL) complex to active genes on the male X where it modulates chromatin to elevate expression. The mechanisms that identify X chromatin are poorly understood. The euchromatic X is enriched for AT-rich, ~359 bp satellites. Autosomal insertions of satellite DNA enable MSL recruitment to nearby genes, suggesting a role as X identity elements. Ectopic expression of dsRNA from one of these satellites produces siRNA and partially restores X-localization of MSLs in males with defective X recognition. Surprisingly, expression of double stranded RNA from three closely related satellites failed to rescue males. We reconstructed dsRNA-expressing transgenes with sequence from two of these repeats and identified phasing of repeat DNA, rather than sequence or orientation, as the factor that determines rescue of males with defective X recognition. Small RNA sequencing revealed that siRNA was produced in male larvae with transgene capable of rescue, but not in larvae carrying a transgene with identical sequence but different phasing that does not rescue males. This suggests that production of satellite siRNA is essential for male rescue, and identifies repeat phasing within the transgene as an important factor in siRNA production.