To identify microRNAs (miRNAs) that may have a causal role in hepatocarcinogenesis, we used an animal model in which C57BL/6 mice fed choline-deficient and amino acid defined (CDAA) diet develop preneoplastic lesions at 65 weeks and hepatocellular carcinomas after 84 weeks. miRNA expression profiling showed significant upregulation of miR-181b and miR-181d in the livers of mice as early as 32 weeks that persisted at preneoplastic stage. The expression of tissue inhibitor of metalloprotease 3 (TIMP3), a tumor suppressor and a validated miR-181 target, was markedly suppressed in the livers of mice fed CDAA diet. Upregulation of hepatic transforming growth factor (TGF)beta and its downstream mediators Smad 2, 3 and 4 and increase in phospho-Smad2 in the liver nuclear extract correlated with elevated miR-181b/d in mice fed CDAA diet. The levels of the precursor and mature miR-181b were augmented on exposure of hepatic cells to TGFbeta and were significantly reduced by small interference RNA-mediated depletion of Smad4, showing the involvement of TGFbeta signaling pathway in miR-181b expression. Ectopic expression and depletion of miR-181b showed that miR-181b enhanced matrix metallopeptidases (MMP)2 and MMP9 activity and promoted growth, clonogenic survival, migration and invasion of hepatocellular carcinoma (HCC) cells that could be reversed by modulating TIMP3 level. Further, depletion of miR-181b inhibited tumor growth of HCC cells in nude mice. miR-181b also enhanced resistance of HCC cells to the anticancer drug doxorubicin. On the basis of these results, we conclude that upregulation of miR-181b at early stages of feeding CDAA diet promotes hepatocarcinogenesis.