The experimental induction of RNA silencing in plants often involves expression of transgenes encoding inverted repeat (IR) sequences to produce abundant dsRNAs that are processed into small RNAs (sRNAs). These sRNAs are key mediators of post-transcriptional gene silencing (PTGS) and determine its specificity. Despite its application in agriculture and broad utility in plant research, the mechanism of IR-PTGS is incompletely understood. We generated four sets of 60 Arabidopsis plants, each containing IR transgenes expressing different configurations of uidA and CHALCONE Synthase (At-CHS) gene fragments. Levels of PTGS were found to depend on the orientation and position of the fragment in the IR construct. Deep sequencing and mapping of sRNAs to corresponding transgene-derived and endogenous transcripts identified distinctive patterns of differential sRNA accumulation that revealed similarities among sRNAs associated with IR-PTGS and endogenous sRNAs linked to uncapped mRNA decay. Detailed analyses of poly-A cleavage products from At-CHS mRNA confirmed this hypothesis. We also found unexpected associations between sRNA accumulation and the presence of predicted open reading frames in the trigger sequence. In addition, strong IR-PTGS affected the prevalence of endogenous sRNAs, which has implications for the use of PTGS for experimental or applied purposes.