Paramutation is an allele interaction that causes a heritable change in the expression of one allele. At the b1 locus an interaction between B' and B-I alleles results in a change of B-I to B', symbolized by B'*. A combination of fine-structure mapping and transgenic approaches have demonstrated that the tandem repeats located ~100 kb upstream of the b1 transcription start site are sufficient for both paramutation and high expression.Plants carrying transgenes with tandem repeats in ectopic locations (repeat-transgene) were able to change B-I into B'*. The B'* state induced by the repeat-transgene was heritable and paramutagenic when segregated from the repeat-transgene. In addition, the repeat-transgene induced B-I silencing was prevented by the trans-acting mutation required for paramutation mop1-1, which was recently found to encode a RNA-dependent RNA polymerase (RdRP). Transgenes containing seven tandem repeats of only the 5' half of the sequence were able to paramutate B-I. Taken together, these results demonstrate that the paramutation sequences are contained in the 5' half of the repeats and they can paramutate B-I from non-allelic positions. Because paramutation induced by the repeat-transgenes and the endogenous B' allele are both heritable and depend on a functional RdRP, they likely involve a similar mechanism of RNA-mediated chromatin modification.Furthermore, we found that the tandem repeats are also sufficient for high expression of the b1 gene. When fused to a GUS reporter gene and introduced into maize, the tandem repeats enhanced GUS expression above the level observed for GUS transgenes that did not have the repeats. As observed with the endogenous B-I allele, the enhancer function of the repeats in the GUS transgenes is silenced by B' and the paramutagenic repeat-transgenes. After being with B' or the paramutagenic repeat-transgenes the repeats in the GUS constructs lost their ability to enhance gene expression.The identification of the tandem repeats as the sequences mediating paramutation suggest a new function for tandem repeats, mediating trans-interactions to establish heritable epigenetic states. Models are discussed for how alleles might communicate in trans to establish different epigenetic states and how the epigenetic state is maintained through mitosis and meiosis.