The Piwi interacting RNA pathway (piRNA) transcriptionally and post-transcriptionally silences transposons in the germline to maintain host genome integrity and faithful transmission of the genetic materials. In Drosophilaovaries, maternally loaded piRNAs kick-start piRNA biogenesis and convert precursor transcripts into piRNAs to replenish the piRNA pool during oogenesis. piRNA clusters are the genomic source of piRNA precursors, which are determined by the HP1 homolog Rhino and accessary factors. Rhino specifically binds to piRNA cluster chromatin. I was intrigued by how Rhino localizes to piRNA clusters to specify piRNA precursors. TREX is a conserved mRNA biogenesis complex composed of UAP56 and the THO complex. Identification of UAP56 as a cluster transcript-processing factor established the link between piRNA biogenesis and the general mRNA processing machinery. In my thesis, I investigated the functions of UAP56 and THO in piRNA cluster transcript processing. I characterized an RNP specific to cluster transcripts, defined by binding with both factors, which is distinct from RNP of bulk mRNA transcripts, and found that assembly of these RNPs depends on Rhino. These findings imply that piRNA precursors are specified co-transcriptionally. Additionally, I found that TREX mutants lead to a loss of Rhino binding specificity. I propose that Rhino and TREX co-transcriptionally scan for cluster and transposon sequences to establish loci that produce piRNA precursors. Surprisingly, I also discovered a piRNA-independent function for TREX in transposon silencing. I showed that TREX mutants lead to transcriptionally activation of a number of transposon families without affecting their piRNA biogenesis and piRNA mediated repressive histone modifications. I propose that TREX could mediate a conserved transposon silencing mechanism.