Transcriptional down regulation caused by intronic triplet repeat expansions underlies diseases such as Friedreich’s ataxia. This down regulation of gene expression is coupled with epigenetic changes but the underlying mechanisms are unknown. Here, we show that the TTC/GAA triplet expansion at the IIL1 gene of Arabidopsis thaliana results in accumulation of 24-nt siRNAs and repressive histone marks at the IIL1 locus, which in turn causes its transcriptional down regulation and an associated phenotype. Knocking down DICER LIKE-3 (DCL3), which processes 24-nt siRNAs, suppressed triplet expansion associated phenotype and helped overcome this transcriptional down regulation and epigenetic silencing. Furthermore, knocking down HEN1, AGO4 or NRPE1, additional components of the siRNA-dependent epigenetic silencing pathway, also suppressed both the repeat expansion phenotype and transcriptional down regulation of IIL1. Thus our results show that triplet repeat expansions can lead to local siRNA biogenesis, which in turn down regulates transcription through an AGO4-dependent epigenetic modification.