Cp1 is a polymorphic short interspersed repeat (SINE) which is distributed over the whole genome of the dipteran Chironomus pallidivittatus, and is particularly abundant in the centromeres. It contains two different sequence modules, one of which, the B module, has a polymerase III internal control region (ICR) typical for tRNA genes (A and B box). Such sequence motifs are common in SINEs and assumed to function in RNA-mediated transposition. In the present case, however, several structural features speak for another role. An investigation of the transcription of the B module shows that it encodes a 99 nt RNA species in vivo, Cp1-RNA, terminating within the module. The transcription unit is likely to have evolved from a pre-tRNA gene and the transcript has sequence similarities to non-processed pre-tRNA. Most of the in vitro transcription is eliminated by deletion or substitution mutation of an upstream TATA box, present within the B module, as well as by changing either the A or B box. The properties of the transcript suggest that it does not have a role in transposition but may have some other function, perhaps in the centromere.