The PIWI-interacting RNA (piRNA) pathway is a small RNA based intracellular immune system protecting animal gonads from the deleterious effects of transposons, thus maintaining transgenerational genome integrity. In Drosophila melanogaster ovaries, piRNA-Piwi complexes localise to the nucleus and scan nascent transcripts for transposon expression by using complementary antisense piRNAs as guides. Following target engagement, the gonad-specific protein Panoramix (Panx) is recruited and induces transcriptional gene silencing (TGS) by connecting to the general chromatin silencing machinery of the cell resulting in changes of the epigenetic chromatin state, thus shutting down transcription. However, whether Panx acts on its own or if other proteins are involved in piRNA-dependent TGS remains unknown. During my PhD I studied the protein-protein interactions of Panx and codiscovered the Panx induced co-transcriptional silencing (PICTS) complex comprised of Panx, Nxf2 and Nxt1. The PICTS complex induces TGS at active transposon insertions in Drosophila ovaries. Furthermore, I studied the effects of epigenetic inheritance of piRNA-Piwi complexes and the PICTS complex during early Drosophila embryogenesis. Piwi showed no zygotic transcription in somatic cells but strong maternal deposition and localised not only to pole cells, the germ line precursors, but was also strongly enriched in somatic nuclei. Additionally, the PICTS complex was both maternally deposited and zygotically transcribed and co-localised with Piwi in somatic nuclei. Several transposons showed strong zygotic expression during early embryogenesis. However, transcriptional gene silencing occurred at individual transposon insertions and repressive chromatin marks accumulated around the genomic location of transposons targeted by maternally deposited piRNAs. Depletion of maternally deposited Piwi resulted in deregulation of transposons and loss of repressive chromatin marks at associated genomic regions. My PhD project uncovered an epigenetic transposon regulatory complex that showed expression not only in gonadal tissue but also in somatic cells during early embryogenesis and revealed a novel function of the piRNA pathway in transposon control by inducing epigenetic chromatin changes during early Drosophila development.