Plants have evolved a number of adaptive strategies to cope with fluctuations in phosphorus (P) supply. The current knowledge of the transcriptional regulation of the P-starvation response in plants is limited. However, one MYB-related transcription factor, PHR1, is known to be involved in the P-starvation response. In this paper, we characterize a T-tagged phr1 knockout mutant and a series of transgenic plant lines which over-express PHR1 in wild type (WT) and phr1 mutant background. The knockout mutant has an altered phosphate (Pi) allocation between root and shoot; accumulates less anthocyanins, sugars and starch than P-starved WT; has a lower AGPase activity; and is impaired in induction of a subset of Pi starvation-induced genes. Expression of PHR1 in the phr1 mutant rescues the responsiveness to P-starvation and leads to WT levels of sugars and starch during Pi starvation conditions, confirming the involvement of PHR1 in adjusting carbon metabolism. Over-expression of PHR1 further resulted in a dramatic increase in the microRNA miR399d, and this resulted in changes in the transcript level for the target gene PHO2. Furthermore, over-expression of PHR1 in both WT and phr1 mutant results in strongly increased content of Pi irrespective of P regime. This shows that targeting a key regulatory element in the Pi starvation regulatory network represents a useful approach for molecular breeding of plants towards more efficient Pi uptake and assimilation.