Tandem repeat elements such as the diverse class of satellite repeats occupy large parts of eukaryotic chromosomes, mostly at centromeric, pericentromeric, telomeric and subtelomeric regions1. However, some elements are located in euchromatic regions throughout the genome and have been hypothesized to regulate gene expression in cis by modulating local chromatin structure, or in trans via transcripts derived from the repeats2–4. Here we show that a satellite repeat in the mosquito Aedes aegypti promotes sequence-specific gene silencing via the expression of two PIWI-interacting RNAs (piRNAs). Whereas satellite repeats and piRNA sequences generally evolve extremely quickly5–7, this locus was conserved for approximately 200 million years, suggesting that it has a central function in mosquito biology. piRNA production commenced shortly after egg laying, and inactivation of the more abundant piRNA resulted in failure to degrade maternally deposited transcripts in the zygote and developmental arrest. Our results reveal a mechanism by which satellite repeats regulate global gene expression in trans via piRNA-mediated gene silencing that is essential for embryonic development.