MicroRNAs (miRNAs) are critical post-transcriptional regulators and are derived from hairpin-shaped primary transcripts via a series of processing steps. However, how the production of individual miRNAs is regulated remains largely unknown. Similarly, loss or overexpression of the key mismatch repair protein MutLα (MLH1-PMS2 heterodimer) leads to genome instability and tumorigenesis, but the mechanisms controlling MutLα expression are unknown. Here we demonstrate in vitro and in vivo that MLH1 and miR-422a participate in a feedback loop that regulates the level of both molecules. Using a defined in-vitro miRNA processing system, we show that MutLα stimulates the conversion of pri-miR-422a to pre-miR-422a, as well as the processing of other miRNAs tested, implicating MutLα as a general stimulating factor for miRNA biogenesis. This newly identified MutLα function requires its ATPase and pri-miRNA binding activities. In contrast, miR-422a downregulates MutLα levels by suppressing MLH1 expression through base pairing with the MLH1 3′-untranslated region. A model depicting this feedback mechanism is discussed.