Since the early 1980s remarkable progress has been made in understanding the role of the HER2 locus in carcinogenesis, but many details of its regulatory network are still elusive. We recently reported the finding of 367 new human microRNA (miRNA) genes of which one, mir-4728, is encoded in an intron of the HER2 gene. Here, we confirm that the HER2 oncogene is a bi-functional locus encoding the membrane receptor and a functional miRNA gene. We further show that miR-4728-3p has alternative functionalities depending on the region used for interaction with its target; the canonical seed between nucleotides 2–8 or a novel, more internal seed shifted to nucleotides 6–12. Analysis of public data shows that this internal seed region, although rare compared to the far more abundant canonical 2–8 seed interaction, can also direct targeted down-regulation by other miRNAs. Through the internal seed, miR-4728-3p regulates expression of estrogen receptor alpha, an interaction that would have remained undetected if classic rules for miRNA-target interaction had been applied. In summary, we present here an alternative mode of miRNA regulation and demonstrate this dual function of the HER2 locus, linking the two major biomarkers in breast cancer.