Epigenetic variation affecting pigment pattern formation in petunia flowers due to the insertion of transgenes encoding chalcone synthase is described. The loss of pigment formation in petals or parts of petals is due to the post-transcriptional degradation of chalcone synthase RNA, from both the endogenous petunia chalcone synthase genes and from the chalcone synthase transgenes. The RNA cleavage pathway and its control are described. Different epigenetic states of RNA breakdown are correlated with specific cytosine methylation changes in the coding sequences of the genes. The probability, extent and developmental location of chalcone synthase RNA breakdown are related to the number and organization of transgenes in the genome but epigenetic switches that affect RNA turnover probably occur in meristems and between sexual generations. Hypotheses to explain how the transgenes influence the levels of chalcone synthase RNA breakdown and how different epigenetic states are created are discussed.