Post-transcriptional gene silencing (PTGS) is a defense mechanism that targets invading nucleic acids from endogenous (transposons) or exogenous (pathogens, transgenes) sources. Genetic screens based on the reactivation of silenced transgenes have long been used to identify cellular components and regulators of PTGS. Here we show that the first isolated PTGS-deficient mutant, sgs1, is impaired in the transcription factor NAC52. This mutant exhibits striking similarities to a mutant impaired in the H3K4me3 demethylase JMJ14 isolated from the same genetic screen. These similarities include increased transgene promoter DNA methylation, reduced H3K4me3 and H3K36me3 levels, reduced PolII occupancy and reduced transgene mRNA accumulation. It is likely that increased DNA methylation is the cause of reduced transcription because the effect of jmj14 and sgs1 on transgene transcription is suppressed by drm2, a mutation that compromises de novo DNA methylation, suggesting that the JMJ14-NAC52 module promotes transgene transcription by preventing DNA methylation. Remarkably, sgs1 has a stronger effect than jmj14 and nac52 null alleles on PTGS systems requiring siRNA amplification, and this is due to reduced SGS3 mRNA levels in sgs1. Given that the sgs1 mutation changes a conserved amino acid of the NAC proteins involved in homodimerization, we propose that sgs1 corresponds to a neomorphic nac52 allele encoding a mutant protein that lacks wild-type NAC52 activity but promotes SGS3 downregulation. Together, these results indicate that impairment of PTGS in sgs1 is due to its dual effect on transgene transcription and SGS3 transcription, thus compromising siRNA amplification.