Intergenic transcription is a common feature of eukaryotic genomes and performs important and diverse cellular functions. Here, we investigate the iab-8 ncRNA from the Drosophila Bithorax Complex and show that this RNA is able to repress the transcription of genes located at its 3' end by a sequence-independent, transcriptional interference mechanism. Although this RNA is expressed in the early epidermis and CNS, we find that its repressive activity is limited to the CNS, where, in wild-type embryos, it acts on the Hox gene, abd-A, located immediately downstream of it. The CNS specificity is achieved through a 3' extension of the transcript, mediated by the neuronal-specific, RNA-binding protein, ELAV. Loss of ELAV activity eliminates the 3' extension and results in the ectopic activation of abd-A. Thus, a tissue-specific change in the length of a ncRNA is used to generate a precise pattern of gene expression in a higher eukaryote.