Mature microRNAs (miRNAs) are generated via a two-step processing pathway to yield approximately 22-nucleotide small RNAs that regulate gene expression at the post-transcriptional level. Initial cleavage is catalysed by Drosha, a nuclease of the RNase III family, which acts on primary miRNA transcripts (pri-miRNAs) in the nucleus. Here we show that Drosha exists in a multiprotein complex, the Microprocessor, and begin the process of deconstructing that complex into its constituent components. Along with Drosha, the Microprocessor also contains Pasha (partner of Drosha), a double-stranded RNA binding protein. Suppression of Pasha expression in Drosophila cells or Caenorhabditis elegans interferes with pri-miRNA processing, leading to an accumulation of pri-miRNAs and a reduction in mature miRNAs. Finally, depletion or mutation of pash-1 in C. elegans causes de-repression of a let-7 reporter and the appearance of phenotypic defects overlapping those observed upon examination of worms with lesions in Dicer (dcr-1) or Drosha (drsh-1). Considered together, these results indicate a role for Pasha in miRNA maturation and miRNA-mediated gene regulation.