IDN2/RDM12 has been previously identified as a component of the RNA-directed DNA methylation (RdDM) machinery in Arabidopsis thaliana, but how it functions in RdDM remains unknown. By affinity purification of IDN2, we co-purified two IDN2 paralogs IDP1 and IDP2 (IDN2 PARALOG 1 and 2). The coiled-coil domain between the XS and XH domains of IDN2 is essential for IDN2 homodimerization, whereas the IDN2 C-terminal XH domain but not the coiled-coil domain is required for IDN2 interaction with IDP1 and IDP2. By introducing the wild-type IDN2 sequence and its mutated derivatives into the idn2 mutant for complementation testing, we demonstrated that the previously uncharacterized IDN2 XH domain is required for the IDN2-IDP1/IDP2 complex formation as well as for IDN2 function. IDP1 is required for de novo DNA methylation, siRNA accumulation, and transcriptional gene silencing, whereas IDP2 has partially overlapping roles with IDP1. Unlike IDN2, IDP1 and IDP2 are incapable of binding double-stranded RNA, suggesting that the roles of IDP1 and IDP2 are different from those of IDN2 in the IDN2-IDP1/IDP2 complex and that IDP1 and IDP2 are essential for the functioning of the complex in RdDM.