What causes solar active region loops to exist at transition region temperatures?

High-lying, dynamic loops have been observed at transition region temperatures since Skylab observations. The nature of these loops has been debated for many years with several explanations having been put forward. These include that the loops are merely cooling from hotter coronal loops, that they are produced from siphon flows, or that they are loops heated only to transition region temperatures. In this paper we will make use of combined SOHO-MDI (Michelson-Doppler Imager), SOHO-CDS (Coronal Diagnostic Spectrometer) and Yohkoh SXT (Soft X-ray Telescope) datasets in order to determine whether the appearance of transition region loops is related to small-scale flaring in the corona, and to estimate the magnetic configuration of the loops. The latter allows us to determine the direction of plasma flows in the transition region loops. We find that the appearance of the transition region loops is often related to small-scale flaring in the corona and in this case the transition region loops appear to be cooling with material draining down from the loop top.