MicroRNAs (miRNAs) are small noncoding RNA molecules that negatively control expression of target genes in animals and plants. The microRNA-21 gene (mir-21) has been identified as the only miRNA commonly overexpressed in solid tumors of the lung, breast, stomach, prostate, colon, brain, head and neck, esophagus and pancreas. We initiated a screen to identify miR-21 target genes using a reporter assay and identified a potential miR-21 target in the 3′-UTR of the programmed cell death 4 (PDCD4) gene. We cloned the full-length 3′-UTR of human PDCD4 downstream of a reporter and found that mir-21 downregulated, whereas a modified antisense RNA to miR-21 upregulated reporter activity. Moreover, deletion of the putative miR-21-binding site (miRNA regulatory element, MRE) from the 3′-UTR of PDCD4, or mutations in the MRE abolished the ability of miR-21 to inhibit reporter activity, indicating that this MRE is a critical regulatory region. Western blotting showed that Pdcd4 protein levels were reduced by miR-21 in human and mouse cells, whereas quantitative real-time PCR revealed little difference at the mRNA level, suggesting translational regulation. Finally, overexpression of mir-21 in MCF-7 human breast cancer cells and mouse epidermal JB6 cells promoted soft agar colony formation by downregulating Pdcd4 protein levels. The demonstration that miR-21 promotes cell transformation supports the concept that mir-21 functions as an oncogene by a mechanism that involves translational repression of the tumor suppressor Pdcd4.