Arabidopsis microRNA (miRNA) genes (MIR) give rise to 20- to 22-nt miRNAs that are generated predominantly by the type III endoribonuclease Dicer-like 1 (DCL1) but do not require any RNA-dependent RNA Polymerases (RDRs) or RNA Polymerase IV (Pol IV). Here, we identify a novel class of non-conserved MIR genes that give rise to two small RNA species, a 20- to 22-nt species and a 23- to 27-nt species, at the same site. Genetic analysis using small RNA pathway mutants reveals that the 20- to 22-nt small RNAs are typical miRNAs generated by DCL1 and are associated with Argonaute 1 (AGO1). In contrast, the accumulation of the 23- to 27-nt small RNAs from the miRNA-generating sites is dependent on DCL3, RDR2 and Pol IV, components of the typical heterochromatic small interfering RNA (hc-siRNA) pathway. We further demonstrate that these MIR-derived siRNAs associate with AGO4 and direct DNA methylation at some of their target loci in trans. In addition, we find that at the miRNA-generating sites, some conserved canonical MIR genes also produce siRNAs, which also induce DNA methylation at some of their target sites. Our systematic examination of published small RNA deep sequencing datasets of rice and moss suggests that this type of dual functional MIRs exist broadly in plants.