MicroRNAs (miRNAs) are implicated in both tissue differentiation and maintenance of tissue identity. In most cases, however, the mechanisms underlying their regulation are not known. One brain-specific miRNA, miR-124a, decreases the levels of hundreds of nonneuronal transcripts, such that its introduction into HeLa cells promotes a neuronal-like mRNA profile. The transcriptional repressor, RE1 silencing transcription factor (REST), has a reciprocal activity, inhibiting the expression of neuronal genes in nonneuronal cells. Here, we show that REST regulates the expression of a family of miRNAs, including brain-specific miR-124a. In nonneuronal cells and neural progenitors, REST inhibits miR-124a expression, allowing the persistence of nonneuronal transcripts. As progenitors differentiate into mature neurons, REST leaves miR-124a gene loci, and nonneuronal transcripts are degraded selectively. Thus, the combined transcriptional and posttranscriptional consequences of REST action maximize the contrast between neuronal and nonneuronal cell phenotypes.