Urothelial carcinoma of the bladder (UCC) is a common disease that arises by at least two different molecular pathways. The biology of UCC is incompletely understood, making the management of this disease difficult. Recent evidence implicates a regulatory role for microRNA in cancer. We hypothesized that altered microRNA expression contributes to UCC carcinogenesis. To test this hypothesis, we examined the expression of 322 microRNAs and their processing machinery in 78 normal and malignant urothelial samples using realtime rtPCR. Genes targeted by differentially expressed micro-RNA were investigated using real-time quantification and microRNA knockdown. We also examined the role of aberrant DNA hypermethylation in microRNA downregulation. We found that altered microRNA expression is common in UCC and occurs early in tumorogenesis. In normal urothelium from patients with UCC, 11% of microRNAs had altered expression when compared with disease-free controls. This was associated with upregulation of Dicer, Drosha, and Exportin 5. In UCC, microRNA alterations occur in a tumor phenotype-specific manner and can predict disease progression. High-grade UCC were characterized by microRNA upregulation, including microRNA-21 that suppresses p53 function. In low-grade UCC, there was downregulation of many micro-RNA molecules. In particular, loss of microRNAs-99a/100 leads to upregulation of FGFR3 before its mutation. Promoter hypermethylation is partly responsible for microRNA downregulation. In conclusion, distinct microRNA alterations characterize UCC and target genes in a pathway-specific manner. These data reveal new insights into the disease biology and have implications regarding tumor diagnosis, prognosis and therapy. [Cancer Res 2009;69(21):8472-81]