Endometriosis is a common disease seen by gynecologists. Clinical features involve pelvic pain and unexplained infertility. Although endometriosis is pathologically characterized by endometrial tissue outside the normal uterine location, endometriosis is otherwise not easily explained. Endometriomas, endometriotic cysts of the ovary, typically cause pain and distortion of pelvic anatomy. To begin to understand the pathogenesis of endometriomas, we describe the first transcriptome-microRNAome analysis of endometriomas and eutopic endometrium using next-generation sequencing technology. Using this approach, we generated a total of more than 54 million independent small RNA reads from our 19 clinical samples. At the microRNA level, we found 10 microRNA that were up-regulated (miR-202, 193a-3p, 29c, 708, 509-3-5p, 574-3p, 193a-5p, 485-3p, 100, and 720) and 12 microRNA that were down-regulated (miR-504, 141, 429, 203, 10a, 200b, 873, 200c, 200a, 449b, 375, and 34c-5p) in endometriomas compared with endometrium. Using in silico prediction algorithms, we correlated these microRNA with their corresponding differentially expressed mRNA targets. To validate the functional roles of microRNA, we manipulated levels of miR-29c in an in vitro system of primary cultures of human endometrial stromal fibroblasts. Extracellular matrix genes that were potential targets of miR-29c in silico were significantly down-regulated using this biological in vitro system. In vitro functional studies using luciferase reporter constructs further confirmed that miR-29c directly affects specific extracellular matrix genes that are dysregulated in endometriomas. Thus, miR-29c and other abnormally regulated microRNA appear to play important roles in the pathophysiology of uterine function and dysfunction.