Overlapping sense/antisense RNAs transcribed in opposite directions from the same genomic locus are common in vertebrates. The impact of antisense transcription on gene regulation and cell biology is largely unknown. We show that sense/antisense RNAs of an evolutionary conserved phosphate transporter gene (Slc34a2a) are co-expressed in a short time window during embryonic development of zebrafish at 48 hours post fertilization (hpf). To address the mechanism by which co-expressed sense/antisense transcripts are processed we have injected sense/antisense RNAs in various combinations into Xenopus oocytes. In the cytoplasm RNAs were stable in whatever combination expressed. In the nucleus co-injected sense/antisense transcripts were degraded into short RNAs of about 23 bases within 4 hours. A homologous transcript from toad or another isoform (Slc34a2b) from zebrafish failed to trigger processing. In oocytes that were primed with nuclear sense/antisense RNA co-injections, a reporter RNA was rapidly degraded. We produced evidence that the observed processing of complementary transcripts was not restricted to Xenopus oocytes as Slc34a-related short RNAs were detected in zebrafish embryos by northern blotting. Signals were observed at stages that showed co-expression of sense/antisense transcripts. Remarkably, strand specific probes revealed that the orientation of short RNAs was developmentally regulated. In addition, RNA from zebrafish embryos 48 hpf was able to induce degradation of reporter constructs in Xenopus oocytes. Our findings may give important clues to understanding the physiological role of the widespread antisense transcription.