Small non-coding vault RNA1-2 modulate expression of cell membrane proteins through nascent RNA silencing

Gene expression can be suppressed by post-transcriptional or by transcriptional gene silencing. Recently, we demonstrated that tRNA-derived small RNA (tsRNA) drive nascent RNA silencing of many genes. RNA polymerase III also transcribes the evolutionary conserved vault RNA (vtRNA), a crucial component of a large ribonucleoprotein complex Vault. Despite, only 5% of vault RNA are associated with the Vault complex, little is known about their Vault-independent cellular roles. Here we show that vtRNA are processed by Dicer into functional small vault RNA (svtRNA) fragments that associate with Argonaute2. Nascent RNA sequencing revealed the highest number of predicted svtRNA1-2 target genes among upregulated genes, in AGO2 and Dicer knockdown, in comparison to other svtRNA. SvtRNA1-2 target sites were detected predominantly in the intronic regions. Genomic deletion of vtRNA1-2 results in the severe inhibition of proliferation and upregulation of genes significantly associated with cell membrane physiology, including ERBB4, and cell adhesion. Finally, we show that svtRNA1-2 hybridises to target genes in a double-seeded manner with a loop protrusion required for intron targeting. Our data revealed a novel role for svtRNA1-2 in gene expression regulation, possessing unique molecular features for targeting genes in introns leading to nascent RNA silencing.