In plants, cell proliferation and polarized cell differentiation along the adaxial-abaxial axis in the primordium is critical for leaf morphogenesis, while the temporal-spatial relationships between these two processes remain largely unexplored. Here, it is reported that microRNA396 (miR396)-targeted Arabidopsis growth-regulating factors (AtGRFs) are required for leaf adaxial-abaxial polarity in Arabidopsis. Reduction of the expression of AtGRF genes by transgenic miR396 overexpression in leaf polarity mutants asymmetric leaves1 (as1) and as2 resulted in plants with enhanced leaf adaxial-abaxial defects, as a consequence of reduced cell proliferation. Moreover, transgenic miR396 overexpression markedly decreased the cell division activity and the expression of cell cycle-related genes, but resulted in an increased percentage of leaf cells with a higher ploidy level, indicating that miR396 negatively regulates cell proliferation by controlling entry into the mitotic cell cycle. miR396 is mainly expressed in the leaf cells arrested for cell division, coinciding with its roles in cell cycle regulation. These results together suggest that cell division activity mediated by miR396-targeted AtGRFs is important for polarized cell differentiation along the adaxial-abaxial axis during leaf morphogenesis in Arabidopsis.