Repeat-associated small interfering RNAs (rasiRNAs) are derived from various genomic repetitive elements and ensure genomic stability by silencing endogenous transposable elements. Here we describe a novel subset of 46 rasiRNAs named LNCR rasiRNAs due to their homology with one long non-coding RNA (LNCR) of Spodoptera frugiperda. LNCR operates as the intermediate of an unclassified transposable element (TE-LNCR). TE-LNCR is a very invasive transposable element, present in high copy numbers in the S. frugiperda genome. LNCR rasiRNAs are single-stranded RNAs without a prominent nucleotide motif, which are organized in two distinct, strand-specific clusters. The expression of LNCR and LNCR rasiRNAs is developmentally regulated. Formation of heterochromatin in the genomic region where three copies of the TE-LNCR are embedded was followed by chromatin immunoprecipitation (ChIP) and we observed this chromatin undergo dynamic changes during development. In summary, increased LNCR expression in certain developmental stages is followed by the appearance of a variety of LNCR rasiRNAs which appears to correlate with subsequent accumulation of a heterochromatic histone mark and silencing of the genomic region with TE-LNCR. These results support the notion that a repeat-associated small interfering RNA pathway is linked to heterochromatin formation and/or maintenance during development to establish repression of the TE-LNCR transposable element. This study provides insights into the rasiRNA silencing pathway and its role in the formation of fluctuating heterochromatin during the development of one holocentric organism.