MicroRNAs (miRNA), small noncoding RNAs, affect a broad range of biological processes, including tumorigenesis, by targeting gene products that directly regulate cell growth. Human polynucleotide phosphorylase (hPNPase(old-35)), a type I IFN-inducible 3'-5' exoribonuclease, degrades specific mRNAs and small noncoding RNAs. The present study examined the effect of this enzyme on miRNA expression in human melanoma cells. miRNA microarray analysis of human melanoma cells infected with empty adenovirus or with an adenovirus expressing hPNPase(old-35) identified miRNAs differentially and specifically regulated by hPNPase(old-35). One of these, miR-221, a regulator of the cyclin-dependent kinase inhibitor p27(kip1), displayed robust down-regulation with ensuing up-regulation of p27(kip1) by expression of hPNPase(old-35), which also occurred in multiple human melanoma cells upon IFN-beta treatment. Using both in vivo immunoprecipitation followed by Northern blotting and RNA degradation assays, we confirm that mature miR-221 is the target of hPNPase(old-35). Inhibition of hPNPase(old-35) by shRNA or stable overexpression of miR-221 protected melanoma cells from IFN-beta-mediated growth inhibition, accentuating the importance of hPNPase(old-35) induction and miR-221 down-regulation in mediating IFN-beta action. Moreover, we now uncover a mechanism of miRNA regulation involving selective enzymatic degradation. Targeted overexpression of hPNPase(old-35) might provide an effective therapeutic strategy for miR-221-overexpressing and IFN-resistant tumors, such as melanoma.