Cutaneous squamous cell carcinoma (cSCC) is the second most common human cancer. Although dysregulation of microRNAs (miRNAs) is known to be involved in a variety of cancers, the role of miRNAs in cSCC is unclear. In this study, we aimed to identify tumor suppressive and oncogenic miRNAs involved in the pathogenesis of cSCC. MiRNA expression profiles in healthy skins (n = 4) and cSCCs (n = 4) were analyzed using MicroRNA Low Density Array. MiR-125b expression was analyzed by quantitative real-time PCR and in situ hybridization in skin biopsies from 40 healthy donors, 13 actinic keratosis, and 74 cSCC patients. The effect of miR-125b was analyzed in wound closure, colony formation, migration, and invasion assays in two cSCC cell lines, UT-SCC-7 and A431. The genes regulated by miR-125b in cSCC were identified by microarray analysis and its direct target was validated by luciferase reporter assay. Comparing cSCC with healthy skin, we identified four up-regulated miRNAs (miR-31, miR-135b, miR-21, and miR-223) and 54 down-regulated miRNAs, including miR-125b, whose function was further examined. We found that miR-125b suppressed proliferation, colony formation, migratory, and invasive capacity of cSCC cells. Matrix metallopeptidase 13 (MMP13) was identified as a direct target suppressed by miR-125b, and there was an inverse relationship between the expression of miR-125b and MMP13 in cSCC. Knockdown of MMP13 expression phenocopied the effects of miR-125b overexpression. These findings provide a novel molecular mechanism by which MMP13 is up-regulated in cSCCs and indicate that miR-125b plays a tumor suppressive role in cSCC.