RNA interference (RNAi) is heritable in Caenorhabditis elegans; the progeny of C. elegans exposed to dsRNA inherit the ability to silence genes that were targeted by RNAi in the previous generation. Here we investigate the mechanism of RNAi inheritance in C. elegans. We show that exposure of animals to dsRNA results in the heritable expression of siRNAs and the heritable deposition of histone 3 lysine 9 methylation (H3K9me) marks in progeny. siRNAs are detectable before the appearance of H3K9me marks, suggesting that chromatin marks are not directly inherited but, rather, reestablished in inheriting progeny. Interestingly, H3K9me marks appear more prominently in inheriting progeny than in animals directly exposed to dsRNA, suggesting that germ-line transmission of silencing signals may enhance the efficiency of siRNA-directed H3K9me. Finally, we show that the nuclear RNAi (Nrde) pathway maintains heritable RNAi silencing in C. elegans. The Argonaute (Ago) NRDE-3 associates with heritable siRNAs and, acting in conjunction with the nuclear RNAi factors NRDE-1, NRDE-2, and NRDE-4, promotes siRNA expression in inheriting progeny. These results demonstrate that siRNA expression is heritable in C. elegans and define an RNAi pathway that promotes the maintenance of RNAi silencing and siRNA expression in the progeny of animals exposed to dsRNA.