Transposable elements are genetic parasites whose mobilization throughout the genome is a major source of deleterious mutations. However, some TE insertions are beneficial because they improve host fitness. Adaptive TE insertions sometimes alter the function of adjacent genes by positively and negatively impacting their expression, or by altering their encoding proteins. Alternatively, individual TE insertions can also be adaptive because they occur in piRNA clusters and lead to piRNA-mediated silencing of transposition. In a recent laboratory evolution experiment, we discovered that the long non-coding RNA CR43651 is an adaptive insertion hot spot for P-element DNA transposons in Drosophila melanogaster. The functional effects of these insertions on P-element repression and CR43651 function were unknown. In this study, we examined the effects of CR43651 insertions on P-element transcriptional regulation, piRNA biogenesis, and viability. We determined that although CR43651 is not a canonical piRNA cluster, chromosomes containing antisense P-element insertions in CR43651 exhibit enhanced piRNA-like silencing in the stage of oogenesis when P-elements transpose, potentially explaining their adaptive benefit. We also discovered that the fitness benefit provided by P-element repression is offset by recessive viability effects of insertion chromosomes, potentially due to disrupted production of mir14, a miRNA produced from CR43651.