microRNAs (miRNAs) are small noncoding RNAs that regulate gene expression by targeting messenger RNA (mRNA) transcripts. Recently, a miRNA expression profile of human tumors has been characterized by an overall miRNA downregulation. Explanations for this observation include a failure of miRNA post-transcriptional regulation, transcriptional silencing associated with hypermethylation of CpG island promoters and miRNA transcriptional repression by oncogenic factors. Another possibility is that the enzymes and cofactors involved in miRNA processing pathways may themselves be targets of genetic disruption, further enhancing cellular transformation. However, no loss-of-function genetic alterations in the genes encoding these proteins have been reported. Here we have identified truncating mutations in TARBP2 (TAR RNA-binding protein 2), encoding an integral component of a DICER1-containing complex, in sporadic and hereditary carcinomas with microsatellite instability. The presence of TARBP2 frameshift mutations causes diminished TRBP protein expression and a defect in the processing of miRNAs. The reintroduction of TRBP in the deficient cells restores the efficient production of miRNAs and inhibits tumor growth. Most important, the TRBP impairment is associated with a destabilization of the DICER1 protein. These results provide, for a subset of human tumors, an explanation for the observed defects in the expression of mature miRNAs.