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Background Subtelomeres are located close to the ends of chromosomes and organized by tandemly repetitive sequences, duplicated copies of genes, pseudogenes and retrotransposons. Transcriptional activity of tandemly organized DNA at terminal chromosomal regions and the distribution of subtelomere-derived non-coding RNAs are poorly investigated. Here we aimed to analyze transcriptional activity of subtelomeric tandem repeat in somatic tissues and cultured cells of birds. We focused on tissue-specific differences of subtelomeric repeats transcription, structure of the resulting transcripts and the behavior of subtelomere-derived RNA during mitosis. Results Transcriptional activity of short subtelomeric PO41 (“pattern of 41 bp”) tandem repeat in the somatic and cultured cells of chicken (Gallus gallus domesticus) and Japanese quail (Coturnix coturnix japonica) was examined using RNA fluorescence in situ hybridization approach. We discovered transcripts from both strands of the PO41 repeat in chicken MDCC-MSB1 cells as well as in chicken and Japanese quail somatic tissues, such as tissues of cerebellum, telencephalon, muscles, oviduct, small and large intestine. Normal somatic and transformed cells demonstrate similar distribution of PO41 repeat transcripts in interphase nuclei. We revealed one or two major foci of PO41 repeat transcripts associated with RNA polymerase II, representing nascent RNA, and dispersed PO41 repeat transcripts localized in euchromatin or interchromatin space, representing released RNA. During mitosis PO41 non-coding RNA distribute between condensed chromosomes till anaphase, when they concentrate at the cleavage plane. At telophase, clusters of PO41 RNA surround terminal regions of chromosomes. Treatments with RNases of different substrate specificity indicate that PO41 repeat transcripts are single-stranded RNAs with short double-stranded regions due to appearance of inverted repeats. Conclusion Transcription of a subtelomeric tandem repeat in avian somatic cells is reported here for the first time. PO41 repeat transcription is conserved among Galliformes and has similar pattern in somatic tissues. We demonstrated redistribution of non-coding PO41 RNA occurring during the cell cycle. Potential regulatory role of the PO41 repeat transcripts in RNA-dependent process of subtelomere heterochromatin maintenance is discussed. Electronic supplementary material The online version of this article (doi:10.1186/s13039-014-0102-7) contains supplementary material, which is available to authorized users.