MicroRNAs are approximately 22-nucleotide (nt) RNAs processed from foldback segments of endogenous transcripts. Some are known to play important gene regulatory roles during animal and plant development by pairing to the messages of protein-coding genes to direct the post-transcriptional repression of these messages. Previously, we developed a computational method called MiRscan, which scores features related to the foldbacks, and used this algorithm to identify new miRNA genes in the nematode Caenorhabditis elegans. In the present study, to identify sequences that might be involved in processing or transcriptional regulation of miRNAs, we aligned sequences upstream and downstream of orthologous nematode miRNA foldbacks. These alignments showed a pronounced peak in sequence conservation about 200 bp upstream of the miRNA foldback and revealed a highly significant sequence motif, with consensus CTCCGCCC, that is present upstream of almost all independently transcribed nematode miRNA genes. Scoring the pattern of upstream/downstream conservation, the occurrence of this sequence motif, and orthology of host genes for intronic miRNA candidates, yielded substantial improvements in the accuracy of MiRscan. Nine new C. elegans miRNA gene candidates were validated using a PCR-sequencing protocol. As previously seen for bacterial RNA genes, sequence features outside of the RNA secondary structure can therefore be very useful for the computational identification of eukaryotic noncoding RNA genes. The total number of confidently identified nematode miRNAs now approaches 100. The improved analysis supports our previous assertion that miRNA gene identification is nearing completion in C. elegans with apparently no more than 20 miRNA genes now remaining to be identified.