Gene-silencing mechanisms are being shown to be associated with an increasing number of fungal developmental processes. Telomere position effect (TPE) is a eukaryotic phenomenon resulting in gene repression in areas immediately adjacent to telomere caps. Here, TPE is shown to regulate expression of transgenes on the left arm of chromosome III and the right arm of chromosome VI in Aspergillus nidulans. Phenotypes found to be associated with transgene repression included reduction in radial growth and the absence of sexual spores; however, these pleiotropic phenotypes were remedied when cultures were grown on media with appropriate supplementation. Simple radial growth and ascosporogenesis assays provided insights into the mechanism of TPE, including a means to determine its extent. These experiments revealed that the KU70 homologue (NkuA) and the heterochromatin-associated proteins HepA, ClrD and HdaA were partially required for transgene silencing. This study indicates that TPE extends at least 30 kb on chromosome III, suggesting that this phenomenon may be important for gene regulation in subtelomeric regions of A. nidulans.