Small RNA (sRNA) molecules regulate a vast array of processes in biology, but evidence for adaptive evolution of sRNA sequences has been indirect. Here, we identify an sRNA, Pxr, that negatively regulates fruiting body development in Myxococcus xanthus. We further show that a spontaneous evolutionary mutation in Pxr abolished its regulatory function and thereby adaptively restored developmental proficiency to a socially defective M. xanthus cheater. In wild-type M. xanthus, development is initiated only upon starvation, but deletion of pxr allows development to proceed even while nutrients remain abundant. Thus, Pxr serves as a major checkpoint controlling the transition from growth to development in the myxobacteria. These findings show that an sRNA molecule governs a complex form of multicellular development in prokaryotes and directly demonstrate the ability of sRNA regulators to facilitate evolutionary adaptations of major phenotypic effect.